Tag: profit and loss statements

A profit and loss statement shows the business’s income and expenses during a period. This reporting period could be a month, quarter or financial year. It is also known as an income statement and can be shortened to a P& L statement.

The profit and loss statement provides information on a business’s ability to generate profits from their total revenue and is measured in various stages from Gross Profit through to Net Profit.

Gross profit is the amount left over from revenue after deducting direct costs and expenses. You may often see the term EBIT for these reports and it means Earnings Before Interest and Tax.

Net profit is gross profit less all operating expenses, depreciation, interest and taxes. For this you may see EBITDA

Net profit becomes retained earnings on the balance sheet.

Posted on by — 3 Comments

Running Multi-Period Profit and Loss Statements

multi-period-profit-and-loss-statement-reporting

Be Aware of the Ebbs and Flows of Your Business: Multi-Period Profit and Loss Reporting

Nearly every business has its busy periods and its quiet ones. Crucial to the success of a business is knowing when these busy periods and quiet ones occur, so you can capitalise on them.

For a lot of Australian businesses offering professional services, December through January is usually when business winds down for the year. In the hospitality and accommodation industry, however, it’s typically the busiest time of the year, so planning for increased business is essential. Continue reading Running Multi-Period Profit and Loss Statements