Whether you are a small business owner just starting off or are considering expanding a business, understanding the fundamentals of basic profit and loss statements is important. A p&l statement will show how well the business is buying and selling products. Statements can show the finances of a company for a month, a quarter, six months or a year.
The basic components of a business profit and loss statement are:
- Sales projections (one of the more difficult parts of a p&l statement)
- Cost of goods
- Controllable expenses such as salaries, advertising, legal expenses and office supplies
- Fixed expenses such as rent, loans or insurance
Know the proper profit and loss statement format for your businessWhen just starting out or growing your business it is important to understand what information needs to go into a business profit and loss statement. There are websites designed to help the small business owner by providing information and tutorials.
Look at profit and loss statement examplesSome websites provide a sample profit and loss statement, so those new to the business sector can see a proper profit and loss statement format.
Review a profit & loss statement template, or compare samples on the webThere are many websites that provide blank profit and loss statement template available for download. Some sites provide the template for free, some charge a small fee and some templates are program specific.
- If you own a specialized business, search non-profit organizations in your industry for profit and loss statements information.
- Before expanding a business, look over past profit and loss statement forms to see if expansion is a viable option.