Profit and Loss

A simple profit and loss statement in standard format records:

•Sales Revenue – the money received from selling goods.

•Cost of Sales – the variable costs of raw materials and the wages of
those employees directly involved in production.

•Gross profit sales revenue less the cost of sales, or profit before
fixed costs is deducted.

•Overheads and Expenses – these can be shown in as much detail as

the business requires for its own planning and monitoring purposes.

•Net Profit – that is the profit after variable costs and fixed costs
have been deducted.
Profit and Loss Statement

Sales Revenue 22,500

-cost of sales 4,500

GROSS PROFIT 18,000

-Expenses 16,780

NET PROFIT 1,220