Profit and Loss Statement Generator

What is a profit-and-loss statement?

A profit-and-loss statement—also called a P&L or income statement—organizes revenue and expenses for a reporting period. It shows whether ordinary business activity produced net income or a net loss.

This generator performs arithmetic on the values you provide. It does not decide how a transaction should be classified for accounting or tax purposes.

Profit-and-loss statement formulas

gross profit = total revenue − cost of goods sold operating income = gross profit − operating expenses net income = operating income + other income − interest expense − other expenses

Gross margin expresses gross profit as a percentage of revenue:

gross margin = gross profit ÷ total revenue × 100

When total revenue is zero, gross margin is unavailable because division by zero has no useful financial meaning.

Worked example

For a fictional business with $12,000 revenue, $4,000 cost of goods sold, $5,500 operating expenses, $200 other income and $100 interest expense:

$12,000 − $4,000 = $8,000 gross profit $8,000 − $5,500 = $2,500 operating income $2,500 + $200 − $100 = $2,600 net income

What belongs in each section?

Revenue

Revenue is income earned from selling products or services during the period.

Cost of goods sold

Cost of goods sold generally contains direct costs associated with producing what was sold. Classification varies by business and accounting method.

Operating expenses

Operating expenses can include rent, insurance, software, professional services, marketing and other costs of running the business.

Other income and expenses

Non-operating items are shown separately so operating performance remains understandable.

Monthly, quarterly and annual statements

A monthly statement helps identify near-term changes. Quarterly and annual statements reduce short-term noise and make longer comparisons easier. Use a consistent accounting method when comparing periods.