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Simple English definitions for legal terms
P & L
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A quick definition of P & L:
Term: P & L
Definition: P & L stands for Profit and Loss. It is a report that shows how much money a business made and spent during a certain time period. This report includes all the money the business earned from sales, as well as all the money it spent on things like salaries, rent, and supplies. The P & L report helps business owners understand how much profit they made or how much money they lost during that time period.
A more thorough explanation:
P & L is an abbreviation for Profit and Loss. It refers to the income statement, which is a financial statement that shows all the revenues, expenses, gains, and losses that a business incurred during a given period.
For example, if a company had $100,000 in revenue and $80,000 in expenses during a quarter, their P & L statement would show a profit of $20,000. On the other hand, if a company had $80,000 in revenue and $100,000 in expenses during a quarter, their P & L statement would show a loss of $20,000.
Another example would be if a company had a gain of $5,000 from selling an asset and a loss of $2,000 from a bad debt during a quarter. Their P & L statement would show a net gain of $3,000.
The examples illustrate how the P & L statement shows the financial performance of a business during a specific period. It helps business owners and investors understand how much money the company is making or losing and where the money is being spent. By analyzing the P & L statement, businesses can make informed decisions about their operations and financial strategies.