What this unit covers
Read a profit and loss statement as the story of what a company earned, spent and kept over a period.
By the end you will be able to
- Explain that a P&L tells the story of what a company earned, spent, and kept over a period.
- Identify revenue, expenses, and net profit as the three parts of that story.
- Explain why a single number like net profit needs its period and story to mean anything.
How it starts: The Page You Almost Skipped
- You open a company's annual report before putting in your savings.
- Revenue from Operations and Total Expenses stare back at you, unfamiliar.
- Do you need someone else to tell you what this page means?
Words you will meet
- Profit & Loss Statement (P&L)
- A report of what a company earned, spent, and kept over a stated period.
- Revenue
- The total money a company earned from its main business during a period.
- Expenses
- The costs a company pays to run its business and earn its revenue.
- Net Profit
- What remains after subtracting expenses from revenue for a period.
In this module: Reading Financial Statements
- Balance Sheet Made Easy
- Profit & Loss Statement (this unit)
- Cash Flow Statement
- Connecting All Three Statements
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