Create professional P&L statements for your business with auto-calculated margins & ratios
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A Profit & Loss (P&L) Statement, also known as an Income Statement, is a financial report that summarizes the revenues, costs, and expenses incurred during a specific period. It shows whether your business made a profit or a loss and is essential for tax filing, loan applications, and business analysis.
Revenue / Income
Total money earned from selling goods or services. Includes sales revenue, service income, and other operating income.
Cost of Goods Sold (COGS)
Direct costs attributable to the production of goods sold by a company. Includes raw materials, direct labor, and manufacturing overheads.
Gross Profit
Calculated as Revenue minus COGS. It represents the profit before deducting operating expenses, salaries, rent, etc.
Operating Expenses (OpEx)
Indirect costs of running the business: salaries, rent, utilities, marketing, depreciation, insurance, and administrative costs.
Operating Profit (EBIT)
Earnings Before Interest and Tax. Calculated as Gross Profit minus Operating Expenses. Shows core business profitability.
Net Profit
The bottom line — what remains after all expenses, interest, and taxes are deducted from total revenue. The ultimate measure of profitability.
Income Tax Filing (India)
Businesses must maintain P&L statements for ITR-3, ITR-4, and ITR-5 filings. It serves as the basis for computing taxable business income under Sections 28 to 44D of the Income Tax Act.
Bank Loans & Credit
Banks and NBFCs require P&L statements for at least 2-3 years to assess creditworthiness for business loans, overdrafts, and working capital facilities.
GST Compliance
Regular filing of GSTR-1, GSTR-3B, and annual returns requires accurate revenue and expense data, which is derived from your P&L statement.
What is the difference between Gross Profit and Net Profit?
Gross Profit = Revenue − COGS. Net Profit = Revenue − All Expenses (COGS + OpEx + Interest + Tax). Gross profit shows production efficiency; net profit shows overall profitability.
How often should I prepare a P&L statement?
For tax compliance in India, annually (for ITR filing). For business management, monthly or quarterly P&L statements help track performance and make timely decisions.
Is depreciation an operating expense?
Yes, depreciation is typically classified as an operating expense. It represents the gradual wear and tear of fixed assets (machinery, vehicles, buildings) and is deductible under the Income Tax Act.
Can I use this P&L for income tax filing?
This tool generates a structured P&L statement for internal use and record-keeping. For tax filing, you should reconcile these figures with your books of accounts and consult a Chartered Accountant.
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