Profit and Loss Statement
A Profit and Loss (P&L) Statement, also known as an income statement, is a financial report that summarizes a company's revenues, costs, and expenses over a specific period, typically quarterly or annually. It shows the company's ability to generate profit by increasing revenue, reducing costs, or both, and is a key component of financial statements used by stakeholders to assess financial performance. The statement calculates net income by subtracting total expenses from total revenues, providing insights into operational efficiency and profitability.
Developers should learn about P&L statements when working in roles that involve financial software, business intelligence tools, or startups where understanding business metrics is crucial for decision-making. It is essential for building applications that track financial data, generate reports, or integrate with accounting systems, helping developers create solutions that align with business goals and financial health. Knowledge of P&L statements is also valuable for developers in product management or entrepreneurial roles to evaluate project costs and revenue impacts.