Form profit and loss satement

Purposes of Profit and Loss Statement

 

If you are running or just are going to run a business, you have to estimate your capabilities and financial resources. Carrying out commercial activity without considering the company's financial situation is impossible. To evaluate the benefits and expenses of you firm properly, you need to create P&L statement. Profit and loss form can be prepared on monthly, quarterly or annual basis. In this article you will find the reasons for completing a sample and a short instruction that will help you to analyze your finances properly.

Why Is It Needed?

If you are a manager, you have to be aware that a profit and loss statement is an integral part of your business. If you are a beginner in carrying out commercial activities, refer to the list of main reasons for creating it:

  • to estimate company`s financial state;
  • to care about all the expenses and benefits;
  • to distribute funds properly to avoid unnecessary payments;
  • to develop sales targets and prices for goods/services;
  • to evaluate the firm`s financial performance;
  • to define whether your enterprise is lucrative.

If you are an experienced manager and your firm has carried out commercial activities for two or more years, you also should compare current profit and loss form with those for previous periods.

Tips to Fill out Profit and Loss Form Correctly

According to the statistics a statement is usually prepared on yearly basis. The process of creating may be quite time-taking and it usually requires lots of attention. All the figures and calculations must be correct and accurate. To estimate the commercial performance of your enterprise in future list all your sales and expense items with the dollar amount for the next three years. Find below the list of details that should be specified on a fillable template:

  • business name and address;
  • current date;
  • activity of a corporation;
  • gross sales and other types of revenue;
  • all spending including depreciation, legal fees, wages and salaries, utilities, rent, meals and entertainment etc.;
  • total income and expenses;
  • net benefit including taxes deducted.

To save time and effort you can try a digital template in PDF. You can complete it effortlessly and then print out or share with your partners in seconds.