Profit And Loss Statement

Business, Legal & Accounting Glossary

Definition: Profit And Loss Statement


Profit And Loss Statement

Quick Summary of Profit And Loss Statement


A set of accounts, usually prepared annually, which depict a company’s trading performance and are normally read in conjunction with the balance sheet and cash flow data. Sometimes called an income statement. Part of the net profit after tax may be used to pay a dividend with the balance being retained within the business for future investment.




What is the dictionary definition of Profit And Loss Statement?

Dictionary Definition


An official quarterly or annual financial document published by a public company, showing earnings, expenses, and net profit. Net income is determined from this financial report by subtracting total expenses from total revenue. The profit and loss statement and the balance sheet are the two major financial reports that every public company publishes. The difference between this statement and the balance sheet deals with the periods of time that each one represents. The profit and loss statement shows transactions over a given period of time (usually quarterly or annually), whereas the balance sheet gives a snapshot holdings on a specific date. also called income statement or earnings report.


Full Definition of Profit And Loss Statement


The profit and loss statement (or income statement, or P&L) is one of the key financial statements a company publishes. In the US, a profit and loss statement is issued each quarter, and a more detailed profit and loss statement is published each year. The profit and loss statement is like a report card on the company’s activities: it presents the net addition (ie, net income) or subtraction (ie, net loss) to retained earnings from operations over a period of time. The profit and loss statement includes intermediary calculations of income – including gross income, operating income, and pretax income – that are crucial to analyzing company operations. The profit and loss statement also presents earnings per share (EPS), which is central to calculating key valuation measures, like the P/E. The profit and loss statement has its limitations, however. First, the profit and loss statement is for a specific span of time, while a company’s activities overlap time-spans. Moreover, critics say, a profit and loss statement is an artificial accounting construction that can only partly measure a company’s success.


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Definition Sources


Definitions for Profit And Loss Statement are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 21st November, 2021 | 0 Views.