P&L: What is it?
P&L stands for Profit and Loss. It is a financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time, usually a fiscal quarter or year. The purpose of the P&L statement is to measure the performance of a company or business unit over time. It is also used to compare the performance of a company to its competitors.
History of P&L
The concept of P&L has been around since the early days of accounting. It was first used by merchants in the Middle Ages to track their income and expenses. As the practice of accounting evolved, the P&L statement became a standard tool for measuring the financial performance of a business. Today, it is used by businesses of all sizes to measure their performance and make decisions about their future.
Comparison Table
| Item | Revenue | Costs | Expenses |
|---|---|---|---|
| Sales | $100,000 | $50,000 | $20,000 |
| Marketing | $20,000 | $10,000 | $5,000 |
| Administrative | $10,000 | $5,000 | $2,000 |
| Total | $130,000 | $65,000 | $27,000 |
Summary
P&L is a financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time. It is used to measure the performance of a company or business unit over time and to compare the performance of a company to its competitors. To learn more about P&L, you can visit websites such as Investopedia, The Balance, and AccountingTools.
See Also
- Balance Sheet
- Cash Flow Statement
- Income Statement
- Revenue
- Cost of Goods Sold
- Gross Profit
- Operating Expenses
- Net Income
- Break-Even Analysis
- Return on Investment
