What is a profit and loss statement?

Profit and loss statements provide a summary of company costs, expenses and revenues for a specific quarter or for the entire fiscal year. This information helps executive management and investors determine a company's net income.

Profit and loss statements are also known as income statements, income and expense statements, operating statements, earnings statements, or revenue statements. Company executives use these statements to determine ways to increase revenue and decrease overhead.

Officials also use profit and loss statements to demonstrate company growth and performance. When selling a business, profit and loss statements demonstrate proof of income and a company's actual worth.