How to Read Your Profit and Loss Statement

Your profit and loss statement shows the income your business earned, the expenses it paid and the net profit left after those costs. Together, these figures give you a clear view of whether the business is making money and where that money is going.

Review your profit and loss statement every month so you can notice trends early. Comparing results from month to month helps you spot rising expenses, seasonal changes and shifts in revenue before they become surprises.

Use what you learn to make better decisions about pricing, spending and hiring. A current profit and loss statement gives you the context to act with confidence instead of relying on the balance in your bank account alone.