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Accounting & close

Income statement (P&L)

Also known as profit and loss statement

An income statement, also called a P&L, reports a company's revenue, expenses, and resulting profit or loss over a period of time, a month, quarter, or year.

Updated July 2026

Key takeaways

  1. An income statement, also called a P&L, reports a company's revenue, expenses, and resulting profit or loss over a period of time, a month, quarter, or year.
  2. The P&L is the first thing a board or investor reads to judge whether the business is actually making money and where margin is leaking.

What is income statement (p&l)?

An income statement, also called a P&L, reports a company's revenue, expenses, and resulting profit or loss over a period of time, a month, quarter, or year. It starts with revenue at the top, subtracts costs and expenses, and ends with net income at the bottom. It shows performance, not position.

Why it matters for fast-growing companies

The P&L is the first thing a board or investor reads to judge whether the business is actually making money and where margin is leaking. Accurate revenue recognition and expense categorization here drive gross margin, burn, and every growth decision that follows.

Frequently asked questions

Does the income statement show cash?+
Not directly. Under accrual accounting, the P&L records revenue when earned and expenses when incurred, regardless of when cash moves. A profitable income statement can coexist with a cash crunch, which is why you read it alongside the cash flow statement to see the full picture.

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