A Profit & Loss statement shows income and expenses over a period — usually a month or year.
Start at the top: revenue (what customers paid or were billed). Then subtract cost of sales to get gross profit.
Next come operating expenses — rent, salaries, marketing, software. What remains is operating profit before tax and interest.
If you only track sales, you can grow revenue and still lose money. A clean P&L tells you whether the business is actually profitable.
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