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Profit and loss account
The ‘P&L’ shows how much money you have made over a period of time. The typical period for financial accounts is a year, but for management accounts you might want a monthly or even a weekly P&L prepared. A P&L in the management accounts for a retailer might look a bit like this:
| Profit and loss account | |
| Sales (turnover) in the period | a |
| Stock at the beginning of the period | b |
| Purchases | c |
| Stock at the end of the period | d |
| Cost of goods sold | e=b+c-d |
| Gross profit | f=a-e |
| Admin expenses and overheads: | |
| Staff costs | g |
| Distribution costs | h |
| Sales | i |
| Marketing | j |
| Bank interest | k |
| Depreciation | l |
| Etc etc etc | m… |
| Sum of above | n=g+h+i+j+k+l+m… |
| Profit before tax (net profit) | f-n |
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