A P&L statement (Profit and Loss, or income statement) is the financial document showing revenue, costs, and resulting profit or loss over a defined period. It's organized into a standard structure: revenue → cost of goods sold → gross profit → operating expenses → operating income → other items → net income. The P&L provides a view of operational profitability distinct from cash flow (P&L uses accrual accounting; cash flow tracks actual cash) and from the balance sheet (which shows assets and liabilities at a point in time rather than performance over a period). It is one of the three core financial statements and a document founders need to read fluently.
The standard P&L structure:
Revenue (top line)...