This term refers to one of the most vital reports. A Profit and Loss Report
Also know as a Statement of Profit & Loss
This is one of the two main reports business owners need to pay attention to.
The other one is the Statements of Financial Position or more commonly known as the Balance Sheet.
The profit and loss is important as it shows how much money the business is making each period.
It will help business owners make judgements on how best to continue to operate their business.
Figures from the profit and loss report or statement, are submitted to HMRC annually under self assessment.
They are also submitted to companies house if registered as a limited company.
It’s helpful to note that when talking about a profit and loss it can be referred to as a statement, report or account.
Don’t worry they are all the same.