What is a Profit and Loss Statement Template?

A profit and loss statement provides insight into a company's performance over a given period of time. It details the company’s total revenue as well as all expenses it had during the period.

Not all organizations use a profit and loss statement to keep track of their net income over a period of time. In the case of non-profits, a statement of activities is utilized instead. Publicly traded companies generally issue profit and loss statements on a quarterly basis.

What’s included in a profit and loss statement?

Profit and loss statements generally contain a number of unique sections that describe different facets of a business's overall performance. These include:

  • Sales — All of the money that a business accrued by way of its various operations forms part of the overall sales number. This section simply details the business’s gross revenue, without subtracting expenses of any kind.
  • Cost of Sales — This section specifies how much capital was used to create a product or provide a service.
  • Selling, General, and Administrative Expense - All expenditures directly or indirectly tied to sales fall under this definition. It also includes all other costs not directly related to product development.
  • Marketing — This section details all the company’s marketing and advertising expenses. It includes the costs accrued to promote the business.
  • Research and Development — The R&D section in a profit and loss statement normally includes the capital expended in the pursuit of new product ideas.
  • Interest Expense — When businesses leverage debt to finance operations and asset acquisition efforts, they take on an added expense that belongs in this section.
  • Taxes — Taxes of all types faced by a given company must appear in this part of its profit loss statement.
  • Net Income — After subtracting all expenses from gross revenue, the resultant figure goes in this section. A company's net income is the amount of money it actually made as profit over a given period of time.

A profit and loss statement provides an overview of a company’s finances over a given accounting period, such as a quarter or year. It provides details beyond the company’s gross revenue or net profit, detailing expenses such as marketing and research and development.