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About the Profit and Loss

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Summary

The Profit and Loss report in Sage Accounting.

Description

The Profit and Loss report shows your business’ sales and expense totals over a given period. It subtracts the associated costs from the sales, to show you what’s left as profit. The Profit and Loss report is sometimes called an Income Statement or Profit and Loss Statement.

Resolution

Why is it important?

The Profit and Loss report assesses a business's financial health, indicating profit or loss. Owners, managers, and boards review it for decision-making. It's crucial for taxes, finance, and presenting the business to stakeholders. Investors and lenders use it to gauge profitability and repayment capacity. Internally, it offers detailed insights, like sales sources and expense analysis, for informed decision-making, such as opening branches or adjusting production.

What's on the report 

What's not on the report

 The following items are not included in the Profit and Loss report:

  • Draft and proforma invoices 
  • Gratuities collected and paid
  • Sales taxes
  • Income taxes
  • Payments and receipts
  • Income such as grants or cash injected by the owners
  • Purchases of significant equipment or assets
  • Loans taken or repaid
  • Owner drawings
  • Investments






Related Solutions

Run the Profit and Loss report