The Profit and Loss A/C Statement provides a complete summary of revenue generated and expenses incurred by a company, which in turns gives an insight whether a company is making profits or a loss.
In simple terms, profit and loss statement provides a detailed look into the financial health of a company over a period of time.
I have created an easy to use Profit and Loss Accounts template, grouping all revenue and expenses. This template is useful for businesses of all sizes.
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Let’s discuss in detail about the template.
Row 2 and 3 = Enter Company/Business Name. Cells C2 to F2. The cells are merged.
Row 4 = Heading of sheet “Profit and Loss Account”. Cells C4 to F4. Cells are merged.
Row 5 = Accounting year details.
Row 7 to Row 12 = Revenue Heading under which all kinds of revenues generated by the company are mentioned like Sales Revenue, Service Revenue, Interest Revenue etc. Cells C7 and D7 are merged.
Note: Please enter net sales revenue amount after deducting sales return and other discounts offered during sales if any.
In cell E7 current year is mentioned and in Cell F7 last year is mentioned to get a comparison from last year’s business activities. Please see the screenshot below:
Row 13 = Total of Revenue or income generated from different sources is reflected in this row for this year and the year passed. If comparison with past year is not required you can leave it blank.
Formula applied here is =SUM(E8:E12)
Row 15 to Row 35 = Expenses heading under which all kinds of expenses incurred by the company are mentioned like Advertizing, Cost of goods sold, depreciation, utilities, employee expenses, rent…etc. Cells C15 and D15 are merged. See the image below:
Row 36 = Total of expenses incurred on different heads are reflected in this row for this year and the year passed. If comparison with past year is not required you can leave it blank.
Formula applied here is =SUM(E16:E35)
Row 38 = Gross income before taxes is reflected in this row. Formula applied here is =E13-E36.
Row 39 = Income tax expense is reflected in this row. Formula applied here is =E38*10%. This percentage can be changed as per our requirement.
Row 41 = Net Income is reflected by deducting expenses incurred out of revenue generated. Gross income – taxes = Net Income.
Formula applied here is =E38-E39.
If revenue is higher than the expenses it is a profit but when revenue is lower than the expenses then there is a loss. The Net Income show a negative value if there is a loss.
If you have any queries share them in comments below and I will be more than happy to help you.