What is an income statement (P&L)?
The income statement — also called the profit and loss statement or P&L — summarizes a period's revenue, costs and expenses, arriving at the profit or loss at the bottom line.
How to read it
Read top to bottom: revenue, minus direct costs (gross profit), minus operating expenses (operating profit), minus taxes and financial items (net result). Each subtraction isolates a different question about the business.
The P&L and your daily records
An income statement is only as good as the records under it. Categorized income and expenses — the daily discipline an ERP like ERP Mobi makes automatic — are what let your accountant produce a P&L you can actually act on.