Your financial reports tell you the story of your business; allowing you to interpret the results of your business activity. The better you understand your financial reports, the better your decision-making and results will be. 

So, what is a profit and loss report? 

Your Statement of Profit & Loss (P&L), or Income Statement, tracks the overall performance of your business. It begins with the Gross Profit from your Trading Account then lists all overhead expenses, giving you the Net Profit. Some software combines the Trading Account and the Profit & Loss into one report, so the items from the Trading Account appear at the top of the Profit & Loss. 

Why is it important to understand your profit and loss report?  

Getting to grips with your P&L report is essential to understand the overall health of the business and therefore, inform your business decision making.  

Which areas are bringing in the highest revenues? What is the average order size? Where can savings be made? Is there enough profit in the business for directors to be allocated dividends? These questions and more can be answered by understanding your P&L.  

When you download Our Guide to Profit and Loss Reports, you will receive: 

  • 6 top tips for beginners trying to understand their business numbers.
  • An overview of the 5 key financial reports.
  • A detailed breakdown of the profit and loss (P&L) report.
  • The key ratios you should be getting from your P&L.
  • Our 5 tips for managing your P&L.