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Business wiki · Accounting and business finance

Profit and loss statement

A statement of income and expenses for a reporting period, showing the resulting profit or loss.

Search terms: P&L income statement

A business example

For one month, a small service business records ₹3 lakh of revenue and ₹2.2 lakh of expenses.

Worked calculationFictional business scenario

  1. Revenue

    ₹3 lakh relates to services earned in the month.

  2. Expenses

    ₹2.2 lakh relates to delivering and running the business.

  3. Result

    ₹80,000 is the simplified profit before tax.

What this shows

If customers have not paid every invoice, the bank may hold much less than the profit suggests. This example omits other income and adjustments.

What it is often confused with

It does not by itself explain loan repayments, owner withdrawals or all changes in cash.

What to look at in your business

Read accounting policies and exceptional items before comparing periods.

Context and further reading

This entry explains the business term. The related guide below provides the next layer of context; any applicable legal test depends on the transaction and relevant period.

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Kosha.Services · Updated 2 October 2026

Related terms

Cash flow

The movement of money into and out of a business over a period.

EBITDA

A profit measure before interest, taxes, depreciation and amortisation, whose adjustments must be clearly defined.