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Profit and loss statement

The profit and loss statement (P&L) is part of the annual financial statement that compares a company's revenues and expenses within a fiscal year. Tax advisors use the P&L to determine taxable profit, make tax optimizations, and assess the financial performance of the company.

Profit and loss statement

Welcome to our "Profit and Loss Statement" category on our question-and-answer portal, dedicated to all aspects surrounding this important financial document in corporate accounting and financial reporting.

Structure and Function of the Profit and Loss Statement
The Profit and Loss Statement (P&L) typically consists of three main sections that reflect a company's financial performance:

• Revenues: These include all income generated by the company during the specified period. This encompasses sales revenues from products or services, interest income, commissions, and other operating revenues.
• Expenses: This category covers all costs incurred by the company in the same period to generate revenues. Examples include material costs, personnel expenses, rent and leasing expenses, depreciation, and interest expenses.
• Result: The result of the P&L is derived from the difference between revenues and expenses. If this value is positive, it indicates a profit; if negative, it indicates a loss.

• Investors and Funders: They use the P&L to assess the financial performance and profitability of a company to make investment decisions.
• Creditors and Banks: These stakeholders review the P&L to evaluate the creditworthiness of a company and make lending decisions.
• Tax Authorities and Regulatory Bodies: They utilize the P&L to determine the tax liability of the company and ensure compliance with legal regulations.

• How to create a P&L statement?
• What are the legal requirements to consider?
• What role does the P&L play in annual financial statement analysis?
• How to interpret the results of the P&L correctly?