What is pnl?

P&L (Profit and Loss Statement)

The Profit and Loss (P&L) statement, also known as the income statement, is a financial report that summarizes a company's financial performance over a specific period, typically a month, quarter, or year. It provides a snapshot of the company's revenues, costs, and expenses, ultimately showing whether the company has made a profit or incurred a loss during that period. It is a crucial tool for understanding a company's financial health and is used by investors, creditors, and management for decision-making.

Key components of a P&L statement include:

• Revenue (also called Sales): The income generated from the company's primary business activities.
• Cost of Goods Sold (COGS): The direct costs associated with producing the goods or services sold.
• Gross Profit: Revenue less Cost of Goods Sold. It represents the profit a company makes before considering operating expenses.
• Operating Expenses: The expenses incurred in running the business, such as salaries, rent, marketing, and administrative costs.
• Operating Income: Gross Profit less Operating Expenses. It reflects the profit generated from the company's core operations.
• Interest Expense: The cost of borrowing money.
• Income Tax: The taxes a company is required to pay on its profits.
• Net Income (or Net Profit): The "bottom line" - the profit remaining after all expenses, including interest and taxes, have been deducted from revenue.

The P&L statement helps assess:

• Profitability: Is the company making a profit, and how sustainable is that profit?
• Operational Efficiency: How effectively is the company managing its costs?
• Growth Trends: Is the company's revenue growing over time?
• Comparison to Competitors: How does the company's performance compare to that of its competitors?