Profit and loss statement template

What is a profit and loss statement?

A profit and loss statement, or P&L, is a financial summary that shows how much money your business made and spent over a set period, and whether it ended up with a profit or a loss. It is one of the core financial statements, and you will also hear it called an income statement or a statement of operations. They all mean the same thing.

The logic is simple: start with your revenue, subtract what it cost to earn that revenue, and what remains is your profit. Businesses produce a P&L monthly, quarterly, or yearly to see how they are doing, and lenders, investors, and the taxman all rely on it. If you are self-employed in the United States, the numbers on your P&L map closely onto the Schedule C you file with the IRS.

The parts of a P&L statement

A P&L reads from the top line down to the bottom line, subtracting as it goes. Knowing the pieces makes the template easy to fill in.

• Revenue. All the income your business earned, sometimes called the top line or turnover.
• Cost of goods sold (COGS). The direct cost of what you sold, such as materials and the labor to make it.
• Gross profit. Revenue minus cost of goods sold, what is left before running costs.
• Operating expenses. The cost of running the business: rent, salaries, marketing, utilities, and so on.
• Operating income. Gross profit minus operating expenses, the profit from your core business.
• Other income and expenses. Items outside normal operations, like interest earned or paid.
• Net profit. The bottom line: what is left after everything is subtracted. A loss shows in parentheses.

Types of profit and loss statement

The structure is the same, but the detail changes with the business, which is why each tab loads a suitable example.

• Small business. A full P&L with revenue, cost of goods sold, and operating expenses.
• Self-employed. A simple income-minus-expenses layout, close to a Schedule C.
• Service. For consultants and agencies, with no cost of goods sold.
• Retail. For product sellers, with inventory and shipping in cost of goods sold.
• Rental. For a rental property: rental income against property costs.
• Nonprofit. Support and revenue against expenses, ending in change in net assets.
• Monthly. The same statement scoped to a single month.
• Simple. Just total income and total expenses for a quick figure.

How to make a P&L statement, step by step

With the generator above it takes just a few minutes. Choose a business type, then:

1. Add your business name and the period the statement covers.
2. List each source of revenue with its amount. The total is added up for you.
3. If you sell products, add your cost of goods sold. Gross profit appears automatically.
4. List your operating expenses, one line each. Operating income is calculated.
5. Add any other income or expenses, such as interest.
6. Check the net profit at the bottom, pick a design, and download in Word or PDF.

How to read your P&L

The most important number is the bottom line, your net profit or loss, but the lines above it tell the real story. Your gross profit shows whether what you sell is priced well above what it costs to make. A healthy gross profit that shrinks to a thin net profit points to high running costs. A weak gross profit means the problem is in your pricing or your direct costs.

The real value comes from comparing periods. Put this month next to last month, or this year next to last year, and you can see whether revenue is growing, whether costs are creeping up, and whether your margins are holding. That trend matters far more than any single figure, and it is what turns a P&L from a tax chore into a tool for running the business.

P&L vs. balance sheet, cash flow, and budget

The P&L is one of three financial statements, and it helps to know how they differ. The P&L shows profit over a period. The balance sheet is a snapshot of what you own and owe at a single moment. The cash flow statement tracks the actual money moving in and out, which can differ from profit because of timing. Together they give the full picture.

A budget is different again: it is a plan for the future, while a P&L reports what actually happened. Many businesses compare the two, setting a budget and then checking it against the P&L to see how close they came. If you want to plan ahead rather than report, our budget template is the better starting point, and our invoice template and receipt template help you capture the revenue that flows into this statement.

Download in Word, PDF, or copy the text

The generator gives you three ways to use your statement:

Tip: this template is perfect for a quick, clean statement. If you keep your books in software like QuickBooks, Xero, or Wave, or a spreadsheet in Excel or Google Sheets, you can pull the figures from there and present them here.

Frequently asked questions