The P&L statement is one of the three most important financial statements for business owners, along with the balance sheet and the cash flow statement (or statement of cash accounting software flows). First, find your gross profit by subtracting your COGS from your gross revenue. Then, subtract your total expenses from the gross profit to calculate the net income.

Company managers and investors use P&L statements to analyze the financial health of a company. Designed for independent contractors and other self-employed individuals, this profit and loss statement includes fields for recording income from multiple clients, tax costs, and business expenses. After you enter income received from each client, the template subtracts expenses and taxes to calculate net income.

Landscaping Business Profit and Loss Template

Also, you need to consider the staff’s salaries, rent, and marketing expenses — all operating expenses. When you’re done with that, you need to evaluate the operating profit by deducting operating expenses from gross profit. The next step is to examine your taxes, interest on loans, and other necessary expenditures — your non-operating items. For this example, it’s recommended that you use the accrual method of accounting. The reason is that this method records expenses or revenue after they’ve provided the service — although the company hasn’t received the cash yet. In this case, you’ll use the single-step P&L statement because it neatly and simply analyzes the bottom line of a small business.

• If you follow just a few of these pieces of advice, you’ll be on your way to creating profit and loss statements that will amaze investors and managers alike.
• The method calculates major line items (gross profit, operating profit, and net profit) from your income statement as a percentage of its base line item (gross revenue).
• It summarizes revenues, costs, and expenses, allowing stakeholders to evaluate profitability.
• The charts included on the template display total income, cost of goods sold, gross profit, total expenses, earnings before interest and taxes (EBIT), and net revenue before and after taxes.

But before we get into that, let’s check out a few common types of P&L statements. Because of the insight they offer, profit and loss statements allow managers, leaders, and investors to make better investing decisions or spot underperforming business areas. Individuals can also use a profit and loss template to track their personal expenses and income so they know if they are saving money or spending more than they make. Food service businesses have to keep track of their food and beverage inventories. This self-employed profit and loss template takes these requirements into account by breaking out income by client and by using expense categories that apply to people who work for themselves.

Download a profit and loss statement template.

This restaurant profit and loss statement provides example sales items, labor costs, and other common restaurant revenue sources and expenses. For simplicity, the template breaks down labor expenses into salaries, hourly wages, and employee benefits. The template also calculates total sales, gross profit, total expenses, and net income. The profit and loss statement (P&L), also referred to as the income statement, is one of three financial statements that companies regularly produce.

Printable Profit and Loss Statement Template

In the subscription age, the accrual method is a much-loved method for recording revenue and sales. When done properly, a P&L can help protect the financial bottom line of a company by offering deeper insights into how a business can reduce costs and increase revenue. What we’re referring to is the profit and loss statement (P&L), which gives you insight into how well your business is doing. Determine whether your rental revenue is exceeding the cost of maintenance and other rental property-related expenses with this P&L template. Download the sample profit and loss template from FreshBooks to get started on yours today.

Universal methods for creating a P&L statement

Public companies are required by law to file regular reports with the U.S. Suppose a budget item from your non-operating income — like insurance proceeds — is through the roof. In this case, the multi-step P&L statement provides you with details about this item. In contrast, the single-step P&L statement typically attaches this non-operating income to other budget items, which doesn’t give a proper explanation for the rise in insurance proceeds.

You can consider it a rough measure of how your business is performing. Every profit and loss statement starts off by showing your company’s revenues. One of the most common reasons small businesses start producing profit and loss statements is to show banks and investors how profitable their business is. Analyzing P&L statements enables investors, managers, and business owners to make informed decisions about product development and management and continuously identify areas for improvement. We’ve compiled a comprehensive list of profit and loss templates for small businesses.

Take your business accounting into your own hands with a variety of accounting report templates, including the free downloadable P&L statement. Simply download, add in your numbers and keep your business financials organized – all for free. Together, alongside the cash flow statement (CFS) and balance sheet (B/S), the P&L statement provides a detailed depiction of the financial state of a company. A company’s statement of profit and loss is portrayed over a period of time, typically a month, quarter, or fiscal year. A profit and loss statement describes how profitable your business is. It shows you how much money flowed into and out of your business over a certain period of time.