21 Free Profit and Loss Statement Templates (Word – Excel)


All businesses exist to make profits. Nonetheless, it is not uncommon for the said businesses to occasionally incur some losses. Regardless of whether they make profits or not, these have to be recorded and kept accurate track of. It is a role that is best accomplished by a profit and loss statement.

Profit and Loss Statement

Also called an income statement, a ‘Profit and Loss Statement’ is a financial document that showcases all the profits, losses, expenditure, revenue inflows, and other incidentals that are incurred in a given financial year and by a particular business or corporate entity.

Basic Takeaways of a Profit and Loss Statement

Though these statements vary significantly from firm to firm, they exhibit some unifying characteristics. Below are some of the main features of the typical profit and loss statement:

  • It is a summary of the revenues, expenses, and associated costs that a business entity incurs over a given period of time.
  • It is one of the three main financial statements that each public, a for-profit entity has to issue out every quarterly and annually. The other two are the cash flow statements and balance sheets.
  • It forms the basis of comparisons between the various financial periods. This is to allow for accurate tracking of the alterations in the research and development spending, net earnings, operating costs, and revenues with time.
  • It provides an in-depth look at the performance of a company.

Purpose of these statements

An income statement is mainly used by financial research analysts and auditors to track the health of the business concerned. It furnishes pieces of information that are vital to the performance of the said enterprises and its projected performance in the long run. Moreover, it may also be used as a gauge or yardstick against which future growth may be gauged or ascertained.

Why Should you Create a Profit and Loss Statement?

This statement plays quite a number of roles. Below are some of the major reasons why it is absolutely essential to the health of the company concerned:

Tracks Revenues and Expenses

This statement plays the role of facilitating the tracking of the revenues and the expenses of the company concerned. Sound knowledge of this tracking definitely aids in similarly making more informed decisions at a later date. It also works to prevent any mishaps and confusion that arise.

Determine Budgeting Needs

Smaller businesses that are yet to gain a foothold will definitely find the statement great and critical for solving their budgeting needs. This they do mainly by identifying those areas that are in dire need of interventions or prioritization. That way, it forestalls the emergence of any further issues.

Peek into the Health of the Business

A glimpse at the profit and loss statement provides a peek into the health of the business. It is possible for one to look at the numbers and the associated breakdowns and straight away deduce the kind of direction that the business is about to take or will most likely take thereafter.

Aid in Financial Decision-making

This statement, alongside the balance sheet and the various cash flow statements, aid in financial decision making. They provide the data and insights that may be relied on when gauging the health of the business concerned. That also enables you to arrive at some sound decision making thereafter.

Make appropriate Comparisons

When juxtaposed with similar statements of varying trading periods, the statement may also enable the various stakeholders to make appropriate comparisons. That way, it allows you to track and clearly gauge the health and the possible directions that the business is bound to take thereafter.

Format of a Profit and Loss Statement

This document may mainly be formatted in two main ways. We devote the proceeding segment of our discussions to just that:

a.) Single-step Income Statement

This format bundles up all the expenses, and the revenues save for the income tax expenses. It is simpler and quicker to make. Nonetheless, it may not always yield the proper and in-depth guidance that a statement of this kind is ordinarily supposed to give off. Then, it is also limited to small businesses only.

b.) Multi-step Income Statements

In this kind of format, the expenses are broken down to their finest levels. In particular, the operating income and gross profits are handled separately in different lines.

To do this, it subtracts the ‘Cost of Goods Sold’ from the ‘Net Sales’ to arrive at the ‘Gross Profit.’ It proceeds to calculate the ‘Operating Income’ after which it adjusts for the interest expenses and the income tax to generate the ‘Income from Continuing Operations.’

Profit and Loss Statement Templates

Profit and Loss Spreadsheet 01

Profit and Loss Spreadsheet Example

Profit and Loss Statement Spreadsheet 02

Profit and Loss Statement Spreadsheet

Profit and Loss Statement Template 03

Profit and Loss Statement Template for Excel®

Profit and Loss Statement for Self Employed 04
Profit and Loss Statement Template for Self Employed Excel®

monthly profit and loss template

monthly profit and loss template excel

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how to create a profit and loss statement in excel

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    Sample of Monthly Profit and Loss Statement

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    Self-Employment Profit and Loss Statement

      Components of a Profit and Loss Statement


      This is the amount of money that flows into the business mainly as the result of the goods or services sold out to the clients. In many statements, this metric occupies the top of the document. It is for this reason that it is also referred to as a ‘top line.’

      Costs of Goods Sold

      These are the direct expenses that are associated with the goods and services that are offered or conferred to the clients. They are what form the bedrock of the profitability of the firms involved.

      Gross Profits

      It is arrived at by subtracting the cost of goods sold from the sales. It gives a picture of the financial health and overall profitability of the firm involved.

      Operating Expenses

      Operating expenses are amounts of money that are incurred to keep the business operational. They include such things as rent, electricity, water, utility, and communications expenses. These expenses are subtracted from the gross profit to find the net profit.

      Operating Income

      It is the difference between the revenues on the one hand and the costs of goods sold and operating expenses on the other hand. This one computes and showcases the profits and the losses of the daily business operations. It goes by the alternate name of the ‘Earnings Before Interests and Taxes.’


      Having a firm knowledge and accurate track of your business’s profits and expenses is definitely a good thing to do. How else can you stay at the top of your niche and operate your business profitably? Well, the profit and loss statement is a document you will find handy to go about this issue!

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