Simple Profit And Loss Statement | Format Example 2021

 Simple Profit And Loss Statement | Format Example 2021:-  A profit and loss statement (P&L) is a statement in which all types of indirect expenses and indirect incomes are included and it is helpful to know net profit or net loss incurred in a company within a specific period of time.

Profit and Loss Statement 2021

Like the type of cash flow statement, The profit and loss statement provides you detailed information about your profits and loss in your businesses and also tells the expenses and revenues of your business.

It's up to how fastly you want to run a profit and loss statement. Some companies choose to run a statement in on month, on the other hand, some companies is interested in quarterly profit and loss statement.

The best way is to create a profit and loss statement by using accounting software, which will take all the tasks by you.  If you are not interested in software then you can choose the template to create a profit and loss statement.

[caption id="attachment_411" align="aligncenter" width="626"]profit and loss format 

There are some steps which are helped to create a profit and loss statement:-

  • Calculate Revenue
  • Calculate cost of goods  sold
  • Subtract the cost of goods sold from revenue to determine gross profit
  • Calculate operating expenses
  • Subtract operating expenses from gross profit to obtain operating profit
  • Add additional income to your operating profit
  • Calculate interest, taxes, deprecation, and amortization
  • Subtract interest, taxes, deprecation, and amortization expenses from EBITDA to obtain a net profit

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Profit and Loss Statement Example 2021

The purpose of a P&L statement is to calculate your per annum growth, how much you earn, or the profit you got this year, or how much you were in loss. This will helped you to calculate all these things.

If you want to make a profit or you make a profit then you can re-invest in your business and earn more. If you invest in any other funds, etc, then also you can make a profit but if you were in loss then it is a clear indication that your business on an unsuitable trajectory and you will find a way to exit.

But on the other hand, P&L can be used to help to make a correct decision about your business:

  • Can you afford to hire a new team?
  • Can you afford to shift an office to a new place?
  • How will you plan about your taxes?
  • Is your current strategy is working or not?

The P&L statement also has additional benefits, depending on who is looking at it.

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