Define: Profit And Loss Statement

UK Accounting Glossary

Definition: Profit And Loss Statement



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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: 6th February 2020.