What is a Revenue & Reduction Account (P&L)?
Welcome to the Buyers Investing Academy chatting glossary of monetary terms and functions.
Our term of the day is “Profit & Reduction Account”
The P&L is a single of the three principal business reporting and measuring tools alongside with the harmony sheet and cashflow statement. The P&L is essentially a investing account for a interval, commonly a 12 months, but also can be monthly and cumulative. It reveals earnings overall performance, which generally has minor to do with funds, shares and belongings.
The P&L typically reveals profits revenues, value of profits/value of goods marketed, typically a gross earnings margin sometimes named ‘contribution’, fixed overheads and or operating expenses, and then a earnings ahead of tax figure A completely in depth P&L can be highly complex, but only due to the fact of all the odd and great procedures and conventions that the corporation employs. Basically the P&L reveals how very well the corporation has carried out in its investing pursuits.
By Barry Norman, Buyers Investing Academy