Fillable Form Profit & Loss Statement
A fillable Profit & Loss Statement, which is a financial statement or business report that shows the revenues, costs and expenses incurred during a specified period.
What is a Profit and Loss Statement?
A profit and loss statement is a financial document used by individuals or corporations to record the financial performance of a business over given accounting periods. More simply put, it is an account of your revenue and expenses during a certain period, which are then used to calculate either the profit or loss made by the company.
It is one of the most important financial statements in business. It is also considered to be a primary source document, which means that it has direct relevance to the decision-making processes undertaken by managers, entrepreneurs, and investors.
A basic profit and loss statement can be separated into top line sales revenue and expenses costs, with the difference between these two representing net income or EBIT (Earnings Before Interest and Taxes).
A profit and loss statement is a key source of benchmark information that can be used for comparison with industry peers, competitors, and various other segments. The statement itself is a result of managerial decisions made within a given time frame. As a result, it provides a valuable source for analysis, including the ability to identify "profit drivers."
In essence, a profit and loss statement is a formal approach to reporting the profitability of an individual or corporation in a specific time frame.
Other names of a profit and loss statement are income statement, earnings report, operating statement, operating expense statement.
As a financial investment tool that has proven itself by establishing its relevance in the finance sector for many years now, a profit and loss statement helps entrepreneurs make important business decisions that will help them perform better in the future. The statement is an important factor in running a successful business as it helps the management to have a better understanding of their financials. It also provides information about the strengths and weaknesses of their existing business model.
A profit and loss statement can be prepared for one month, quarter, or year at a time. The basic structure includes revenues (which are considered to be the money brought in by selling goods or services) and expenses (which are items such as employee wages, cost of materials, and operating costs).
In general, here are the important components of a profit and loss statement and their descriptions:
Income — This is the figure that calculates how much revenue your company made through the selling or trading of goods. This part in a P&L statement shows the total sales volume during a given time period.
Expenses — This is where you list down all the costs related to making your product, ranging from raw materials to employee salaries. Generally, expenses are broken into two groups: Cost of Goods Sold (COGS) and Operating Expenses.
Gains — This part shows the revenue sources other than sales, such as interest earned from investments or rebates given by your suppliers for purchasing goods earlier than expected. This part is usually shown as a negative number since it reduces the overall income.
Losses — This part lists down all the sources of expenses other than materials and wages, including interest paid on loans or bank charges for delayed payments. This part is usually shown as a positive number since it reduces the overall income.
Income Before Interest and Taxes (EBIT) — This is calculated by taking away Operating Expenses and Gains from the Total Income. This essentially means that EBIT calculates how much net income your company earned before taking away taxes for the given period of time.
Taxes — This is figured by multiplying the Income Before Tax figure by the tax rates filed with your local or national government offices, depending on where you are conducting business activities.
Net Income/Profit/Earnings — This is the final amount of money your company earned during a given period of time after deduction of all costs and taxes. This part in a P&L statement shows the net income generated by running your business. It can be considered as your final profit after selling products and paying for operating expenses within a set time period.
In general, the formula used for the P&L statement is:
Sales – Cost of Sales = Profit/Net Income
where "Cost of Sales" comprises both direct costs and indirect costs in order to produce that product. Indirect costs could be distribution costs, sales commissions, and other miscellaneous expenses.
In other words, the formula is:
Net Profit = Total Revenue (Profit) – Total Cost (Expenses)
At the end of the day, when you look at your P&L statement in numerical format, it can give you a clear indication of what factors in your business need further improvement in order to achieve better results in the future. It also helps identify where to reduce spending and where to focus in order for your business to perform optimally.
How to fill out a Profit and Loss Statement?
Follow the guide below to fill out a profit and loss statement accurately.
Enter your company’s name and address at the topmost part of the profit and loss statement Then, enter the period of time to be evaluated.
Income
Expenses
Profit/Loss
Prepared by
Date
Under the income section, enter the amount of your company’s Sales income and Other Income. For other income, include non-operating income such as rental or interest. Then, compute for the Total Income Amount.
Under the expenses section, enter the amount of your company’s Advertising, Bank Charges, Depreciation, Equipment Rental, Insurance, Interest, Office Supplies, Postage & Printing, Repairs & Maintenance, Salary, Telephone & Internet, Training/Seminars, Utilities, and Vehicle expenses. For Other Expenses, enter the amount your company has spent for other applicable expenses. Then, compute for the Total Expenses amount.
Enter the profit or loss amount of your company. Determine the amount by subtracting the Total Expenses Amount from the Total Income Amount.
Enter your name if you are the person who prepared the profit and loss statement. If there are multiple people who prepared the P&L statement, write all of their names for accountability and transparency purposes.
Enter the date the profit and loss statement was created.
What makes a good profit and loss statement?
A good profit and loss statement should be clear and concise, providing insight into the performance of your business. It provides an accurate picture of your financial performance over time which can help you make informed decisions about investments, pricing strategies, and other operations. It should also contain sufficient detail to allow you to identify areas of profit/loss as well as potential cost savings or growth opportunities.
Profit and Loss statements are a useful tool for understanding your business’s financial position, making budgeting easier, and helping plan for future growth. With the right information, strategies in place, it can help you reach both short-term goals and long-term objectives.
By regularly analyzing your profit and loss statement, you will gain valuable insights about your business operations that can give you an edge over competitors. No matter what size operation you have, profit and loss statements. By taking the time to review your statement regularly, you can ensure that your business remains profitable in the long run.
If you are unsure how to create a Profit and Loss Statement, consult with an accountant who can provide assistance. They can also explain the various components of the statement and how they can help you assess your profitability. Additionally, there are many online tools available that allow you to generate a Profit and Loss Statement quickly and easily such as this one from PDFQuick. With the right resources, you can make sure that your business is on track and achieving its goals.
What is the difference between a profit and loss statement and a balance sheet?
The profit and loss statement is a financial document that shows your business's income, expenses, and net profit over a specific period of time. A balance sheet presents assets, liabilities, and equity at a given point in time.
A profit and loss statement primarily focuses on income and expenses while a balance sheet focuses on assets and liabilities. The profit and loss statement can be used to track progress towards goals while the balance sheet provides an overview of overall financial health.
Both documents are important for understanding your business’s finances, but they serve different purposes. By utilizing both documents you can gain valuable insight into your business operations which will help you make informed decisions about investments, pricing strategies, and other operations.
What is the difference between a profit and loss statement and an income statement?
Although a profit and loss statement shares some commonalities with an income statement, they are not the same. Both types of statements show the financial performance and health of a business over a specified time period. An income statement covers earnings or losses for an entire company while a profit and loss statement breaks down this information by divisions or departments within the organization.
An income statement is similar to a profit and loss statement in that it tracks the flow of money into and out of the business during a given period of time. However, an income statement does not include information about assets or liabilities which are found on a balance sheet.
Do all businesses have to make P&L statements?
Trading companies have to make P&L statements and submit their financial reports to the U.S. Securities and Exchange Commission (SEC) for outside examination by investors, analysts, and government officials. There is a set of generally accepted accounting principles (GAAP) rules that businesses must follow when they are making these types of documents.
On the other hand, private companies are not always required to comply with GAAP. Some smaller companies might not even prepare formal financial statements.
However, profit and loss statements can still be beneficial for private companies.
By creating profit and loss statements, businesses can gain insight into their financial performance which can help them make decisions about investments, pricing strategies, marketing initiatives, and more. Regular profit and loss statement analysis is recommended for all businesses regardless of size or industry.
Can you make a fake profit and loss statement?
No. Even if you’re not required to submit your profit and loss statement to the SEC, it is still important to be truthful when completing these documents. Misrepresenting profit and loss statements can lead to legal trouble for businesses so it is important to ensure accuracy when making profit and loss statements.
It is also worthwhile to seek outside help from a financial or accounting expert who understands all of the rules and regulations related to profit and loss statements. This will help ensure that your profit and loss statement is accurate and complies with any applicable laws or regulations.