Statement of Profit or Loss

Introduction: The Statement of profit or loss

summarizes of the revenues, costs and expenses incurred during a specific period
of time, usually a fiscal quarter or year. Commonly referred to as the income statement,
is one of three financial statements every public company issues quarterly and annually,
along with the balance sheet and the cash flow statement.

Body:

Revenue is all income that a company receives.

Expenses is incurred to produce your company’s revenue. Separate your expenses

into various categories to help you better see how money is being spent.

Net income is the final amount of the statement profit or loss, and it represent the net
total profit earned by the business during the period, above and beyond all related costs
and expenses.

Example:

Prepare an Income Statement for Micro Fund Inc. for the period ended December
31, 2015, on the basis of the information supplied.
 Micro Fund Inc.

STATEMENT OF PROFIT OR LOSS / INCOME STATEMENT

For the period ended December 31, 2015

FINANCIAL INCOME:
Interest on Current & Past Due Loans 4,500

Interest on Investments 200

Loan Fees/Service Charges 1,500

Total Financial Income 6,200

FINANCIAL COSTS:
Interest on debt 600

Interest paid on deposits 20

Total Financial Costs 620

GROSS FINANCIAL MARGIN 5,580

Provision for Loan Losses 1,000

NET FINANCIAL MARGIN 4,580

Operating Expenses
Salaries & Benefits 2,000
Rent 425
Utilities 35
Office Expenses 275
Travel 145
Depreciation 110
Equipment Leasing 700
Software 500
Other 200
Total Operating Expenses 4,390

NET INCOME FROM OPERATIONS 190

Grant Revenue for Operations 2,000

Excess of Income over Expenses 2,190

Conclusion:

Therefore I conclude that all companies need to make statement of profit or loss

generate revenue to stay in business. Because Revenue are used to pay expenses,
interest payments on debts, and taxes owned to the Government. And the business
paid the amount left over is also called Net income.

Recommendation:

So, Statement of profit or loss is important in every businesses because we need

to know how to compute the revenue or sales, expenses and the net income in our
company so that we will know that our company is gaining or losing. And I recommend
that we should know how to make the statement of profit or loss because it will help the
company’s growth.