The Story of the Profit & Loss Statement

As a Non-Finance manager there are 3 main things you can look for when looking at a P& L;

The problem is most don’t know where to look and what is what or even what the purpose of a P & L is.

Not being Accounting literate can be daunting and overwhelming.

Let’s take a few steps back:

a P & L a.k.a Income statement is 1 of the 3 financial reports that tells us the story of the financial performance of a business
The P & L shows how much Income and Expenses were recorded in a financial period over 12 months
The P & L basically shows how much profit the business generated by the efforts of its people and its operations
The monthly profit or loss that the business made is transferred to the Balance sheet as equity on a monthly basis
At the beginning of each financial period the P & L resets and starts recording profit from day one until the end of the financial period…it then stops…transfers the total profit to equity, then resets and starts all over again

Sounds simple right?

Well, that is how we explain concepts and principles in our 1 day Accounting Made Easy virtual training program using color and visuals.

Join us and let’s empower you to concurring your fear of the numbers and helping you read and interpret financial information.