{"id":14386,"date":"2026-05-27T07:42:14","date_gmt":"2026-05-27T07:42:14","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/profit-and-loss-statement\/"},"modified":"2026-05-27T07:42:14","modified_gmt":"2026-05-27T07:42:14","slug":"profit-and-loss-statement","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/profit-and-loss-statement\/","title":{"rendered":"Profit and Loss Statement"},"content":{"rendered":"

A Profit and Loss (P&L) Statement, also called an income statement<\/a>, is a financial report that summarises a company’s revenue<\/a>s, costs, and expenses<\/a> during a specific period, showing whether the company made a profit or a loss. It is one of the three core financial statements alongside the Balance Sheet and Cash Flow Statement<\/a>.<\/p>\n

What Is a P&L Statement?<\/h2>\n

The P&L shows:
\n– How much revenue the company earned
\n– What it cost to generate that revenue (cost of goods sold)
\n– What operating expenses<\/a> were incurred
\n– What the company earned or paid in interest, tax<\/a>es, and other items
\n– The final net profit<\/a> or loss<\/p>\n

P&L Structure<\/h2>\n

**Revenue (Net Sales):** Total income from the company’s main business<\/p>\n

minus<\/p>\n

**Cost of Goods Sold (COGS):** Direct costs of producing the goods or services sold<\/p>\n

equals<\/p>\n

**Gross Profit<\/a>**<\/p>\n

minus<\/p>\n

**Operating Expense<\/a>s (Opex):** Salaries, rent, marketing, R&D, depreciation<\/p>\n

equals<\/p>\n

**Operating Profit<\/a> (EBIT<\/a>)**<\/p>\n

minus\/plus<\/p>\n

**Interest income\/expense, other non-operating items**<\/p>\n

equals<\/p>\n

**Pre-Tax Profit<\/a> (PBT)**<\/p>\n

minus<\/p>\n

**Income Tax<\/a>**<\/p>\n

equals<\/p>\n

**Net Profit (PAT – Profit After Tax)**<\/p>\n

Why the P&L Matters<\/h2>\n

– **Profitability assessment**: is the business making money?
\n– **Revenue growth tracking**: are sales growing?
\n– **Margin analysis**: gross, operating, and net margin<\/a>s show efficiency
\n– **Earnings per share**: net profit divided by shares<\/a> outstanding is the key earnings metric
\n– **Basis for valuation**: P\/E ratio<\/a> is based on net profit (EPS)<\/p>\n

Practical Example<\/h2>\n

A retail company’s P&L shows Rs 100 crore revenue, Rs 60 crore COGS, Rs 25 crore operating expenses, Rs 5 crore interest, and Rs 3 crore tax. Gross profit is Rs 40 crore (40% margin), operating profit is Rs 15 crore (15% margin), and net profit is Rs 7 crore (7% net margin).<\/p>\n

Key Takeaways<\/h2>\n

– The P&L Statement shows revenues, expenses, and net profit or loss for a period
\n– Key metrics: gross profit margin<\/a>, operating profit margin<\/a>, and net profit margin<\/a>
\n– Prepared quarterly and annually by listed companies; published as part of financial results
\n– Forms the basis for EPS calculation, P\/E valuation, and peer comparison
\n– Should be read alongside the Balance Sheet and Cash Flow<\/a> Statement for a complete financial picture<\/p>\n","protected":false},"excerpt":{"rendered":"

A Profit and Loss (P&L) Statement, also called an income statement, is a financial report that summarises a company’s revenues, costs, and expenses during a specific period, showing whether the company made a profit or a loss. It is one of the three core financial statements alongside the Balance Sheet and Cash Flow Statement. What […]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-14386","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"A Profit and Loss (P&L) Statement, also called an income statement, is a financial report that summarises a company’s revenues, costs, and expenses during a specific period, showing whether the company made a profit or a loss. It is one of the three core financial statements alongside the Balance Sheet and Cash Flow Statement. What…","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14386","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/14386\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=14386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}