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What do you get from a companys profit and loss statement?

In the context of corporate financial reporting, the income statement summarizes a company's revenues (sales) and expenses quarterly and annually for its fiscal year. The final net figure, as well as various others in this statement, are of major interest to the investment community. Income statements come with various monikers. The most commonly used are "statement of income," "statement of earnings," "statement of operations" and "statement of operating results." Many professionals still use the term "P&L," which stands for profit and loss statement, but this term is seldom found in print these days. In addition, the terms "profits," "earnings" and "income" all mean the same thing and are used interchangeably. The P&L will inform you whether your business made or lost money for the month under review. A P&L usually has five main components: revenue (sales/turnover) cost of goods sold (COGS) gross profit (revenue minus COGS) expenses net profit (gross profit minus expenses) Gross profit is an indicator of efficiency. The higher the gross profit margin the better, as your business keeps more from each dollar of sales. If your gross profit margin decreases over time you will need to determine the reason and take action to address the decline. The net profit margin is an indicator of how much profit you make (before tax) from every dollar you spend. A fall in net profit margin generally means you are paying more in expenses, which needs to be monitored. More profitable businesses generally spend less of their income on expenses.