Free template

Free Profit and Loss Statement Template

Name: Profit & Loss Statement
Brand: Loio
Rating: 4.9 (39 reviews)

4.9 (39 reviews)

All states

Updated Jul 25, 2026

~ 1 page

PDF

4.7K downloads

A profit and loss statement (P&L), also called an income statement, summarizes a business’s revenue and expenses for a specific period. Use this profit and loss statement template to calculate gross profit and the resulting profit or loss for a month, quarter, or fiscal year.

Preview

Written by Megan Thompson, LLB - Reviewed by Kate Adkham, LLB

What Is a Profit and Loss Statement

Copy section link

A profit and loss statement template shows how much a business earned and spent during a reporting period. It helps business owners review profitability, compare results with a budget, and track financial performance over time.

In corporate finance and business economics, a P&L is usually reviewed alongside other financial statements. A balance sheet shows assets, liabilities, and equity at a specific point in time. A cash flow statement tracks how cash moves into and out of the business. The SBA includes income statements, balance sheets, and cash flow statements among the financial projections businesses may prepare.

Single-step vs. multi-step P&L statements

A single-step P&L statement calculates profit with a simple formula:

Revenue – Expenses = Profit or Loss

A multi-step P&L statement separates major categories such as the cost of goods sold (COGS) and operating expenses. This makes gross profit and major cost categories easier to review.

The Loio profit loss statement template uses a simplified multi-step structure:

Total Revenue – Total COGS = Gross Profit

Gross Profit – Total Operating Expenses = Net Profit or Loss

More detailed income statements may also report interest, taxes, depreciation, amortization, and non-operating items separately.

When to Use a Profit and Loss Statement

Copy section link

A P&L can be prepared whenever a business needs to evaluate financial performance over a defined period. Common uses include:

Monthly or quarterly reviews: Compare revenue and expenses over shorter periods to identify changes in performance.
Annual or fiscal year analysis: Review overall profitability and compare results with previous years.
Budget planning: Compare actual results with projected revenue and expenses and adjust future plans.
Loan or financing applications: Provide financial information a lender may use when evaluating business performance and repayment capacity.
Investor discussions: Present revenue, costs, margins, and profitability when discussing business performance.
Tax preparation: Organize business income and expense information that may support preparation of applicable tax returns.

Businesses may also compare P&L trends with operational strategies and external factors such as market demand, financing costs, or trade-related expenses. Broader market dynamics, including financial markets, market liquidity, and investor behavior, may influence financial decisions but are not P&L line items.

A P&L is not a federal tax return. Sole proprietors generally use IRS Schedule C to report business profit or loss, while domestic C corporations generally use Form 1120.

Parties/Users of a Profit and Loss Statement

Copy section link

Business owners and managers use P&Ls to review revenue, costs, margins, budgets, and operating performance.

Accountants and bookkeepers may use P&L data when preparing financial statements, reviewing business records, and supporting tax preparation.

Lenders and other financial services providers may review income statements when assessing financial performance and repayment capacity.

Investors may use revenue, expenses, margins, and net income to evaluate company performance. Public-company investors can also find income statements in annual Form 10-K and quarterly Form 10-Q filings explained by Investor.gov.

Tax preparers may use financial records and P&L information when preparing applicable federal and state returns.

The Key Components of a Profit and Loss Statement

Copy section link

Business information: Enter the reporting period, company name, email, and address.

Revenue: Record sales revenue, service revenue, and other revenue, then calculate total revenue. Revenue may also be described as gross income in some financial contexts. Investor.gov defines revenue as money generated from selling goods or services.

Cost of goods sold: Enter direct material costs, direct labor costs, and other production costs directly connected with providing goods or services.

Gross profit: Subtract total COGS from total revenue. Gross profit shows how much remains after direct production costs.

Operating expenses: Record marketing and advertising, employee salaries, office rent, utilities, maintenance, and other operating expenses.

Net profit or loss: Subtract total operating expenses from gross profit. This is the final calculation in the Loio profit and loss template. Formal net income generally reflects all applicable expenses and taxes, so additional items may need to be accounted for separately.

How a P&L fits with other financial statements

A P&L focuses on profitability, while a balance sheet reports assets and liabilities and a cash flow statement tracks cash movement. Reviewing these statements together can support financial planning, risk management, capital management, and assessments of a company’s financial stability.

For example, a business may report a profit but still have limited cash available if customers have not yet paid outstanding invoices.

Key Terms in a Profit and Loss Statement

Copy section link

Revenue: Money generated from the sale of goods or services before expenses are deducted.

Cost of goods sold: Direct costs associated with producing the goods or services a business sells.

Gross profit: Total revenue minus the cost of goods sold.

Operating expenses: Costs of running the business that are not included in COGS, such as rent, salaries, utilities, and marketing.

Net profit: The amount remaining after the expenses included in the statement are subtracted from revenue. A complete net income calculation may include additional expenses and taxes.

Depreciation: The allocation of the cost of a tangible asset over its useful life.

Amortization: The gradual allocation of certain costs, commonly including intangible assets, over a defined period.

Fiscal year: A 12-month accounting period a business uses for financial and tax reporting. IRS Publication 538 explains calendar years, fiscal years, and other accounting periods.

How to Fill Out a Profit and Loss Statement Template

Copy section link

Enter the reporting period and company details. Specify the month, quarter, fiscal year, or other period covered by the statement, then add the company name, email, and address.
Record revenue. Enter sales revenue, service revenue, and other revenue, then calculate total revenue.
Enter the cost of goods sold. Record direct material costs, direct labor costs, and other production costs, then calculate total COGS.
Calculate gross profit. Subtract total COGS from total revenue.
Record operating expenses. Add marketing and advertising, employee salaries, office rent, utilities, maintenance, and other applicable operating expenses.
Calculate net profit or loss. Total the operating expenses, then subtract that amount from gross profit.

Check the completed P&L statement template against invoices, receipts, payroll records, accounting records, and other supporting documents before using the figures for financial decisions.

FAQ

Copy section link

Can I do my own profit and loss statement?

Yes. A business owner can prepare a P&L using accurate income and expense records. A P&L template provides a structured way to organize the figures and calculate gross profit and profit or loss.

Businesses with complex transactions or formal financial reporting requirements may need help from an accountant or other financial professional.

Does Word have a profit and loss template?

Microsoft offers general business templates for Word, while many of its financial-management and profit-and-loss templates are designed for Excel. Excel can also perform calculations automatically. See Microsoft business templates for available options.

You can also use Loio’s ready-made P&L template and enter the required figures without creating the document structure yourself.

Should I prepare a profit and loss statement monthly, quarterly, or annually?

The best reporting period depends on how the statement will be used. Monthly P&Ls provide frequent performance updates, while quarterly statements can help identify broader trends. An annual P&L summarizes results for the full year.

Businesses may use several reporting periods for budgeting and financial planning. The SBA also includes projected income statements among the financial projections businesses may prepare.

What is the difference between gross profit and net profit?

Gross profit is total revenue minus the cost of goods sold.

Net profit generally reflects what remains after applicable expenses are deducted. This template subtracts COGS and the listed operating expenses. If interest, taxes, depreciation, amortization, or other costs apply, a more detailed calculation may be needed.

What is EBITDA, and does this P&L template calculate it?

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. Businesses and investors may use it as one measure of operating performance.

This template does not calculate EBITDA separately because it does not provide separate fields for those four items. EBITDA is also different from cash flow.

What is the difference between cash and accrual accounting?

Under the cash method, income is generally reported when received and expenses when paid. Under the accrual method, income is generally reported when earned and expenses when incurred. IRS Publication 538 explains both accounting methods.

Use the accounting method applicable to your business consistently when comparing P&L periods.

Disclaimer

This template is intended for general use across all 50 U.S. states+DC. Local procedures — such as notarization, witnessing, or filing requirements — may still apply, so check your state's specific rules before signing.

Sources

IRS Form 1120, U.S. Corporation Income Tax Return — federal income tax reporting for domestic corporations.
IRS Publication 538, Accounting Periods and Methods — federal guidance on accounting periods and cash and accrual methods.
U.S. Small Business Administration — Plan Your Business — guidance on financial projections, including income statements, balance sheets, and cash flow statements.
Investor.gov — How to Read a 10-K/10-Q — SEC investor guidance on corporate financial statements and reporting.