How Do You Prepare A Profit & Loss Statement?
A profit and loss statement measures a company’s sales and expenses during a specified period of time. The purpose of a profit and loss statement is to total all sources of revenue and subtract all expenses related to the revenue. It shows a company’s financial progress during the time period being examined. Enter your company’s name in the header of the statement. In addition, add the period the profit and loss statement will reflect. Enter data for net sales. The company’s net sales are the total sales during the time period being analyzed minus any allowances for returns and trade discounts. The amount allowed for returns will vary depending on what type of business you are running. Calculate the cost of goods sold. The company’s cost of goods sold is also called the cost of sales. If you are a retailer or a wholesaler, it is the total price paid for the products sold during the accounting period. To calculate the cost of goods sold you will use the following calculation below and r
