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Profit & Loss Finalization

The profit and loss (P&L) statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year. The P&L statement is synonymous with the income statement. These records provide information about a company's ability or inability to generate profit by increasing revenue, reducing costs, or both. Some refer to the P&L statement as a statement of profit and loss, income statement, statement of operations, statement of financial results or income, earnings statement or expense statement.Tax my Tax helps you to prepare true and correct Profit & Loss for your business.

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How to Prepare Profit and Loss Account online ?

A Step by step guide that will help you e-file income tax return by Tax My Tax Accounts Team
Step 1 Concept Understanding

Our team helps you to understand the concept of Balance Sheet and helps you to gather all the required data for Balance Sheet preparation and helps you to maintain an easy system for Accounts and guides you for your books

Step 2 Submission of Requisite Documents

Our team of professionals prepare the necessary data and guides you for with simple and transparent accounting process with complete and clear understanding of your business with the all connected vendors.

Step 3 Preparing Accounts and Reporting

Our Accounts team will file the prepare and share you the books of accounts as maintained . We also provide the report that enables you for better and transparent decision making for your business

Overview & Concept

What is the maning of  Profit & Loss Statement ?
A profit and loss statement (P&L), or income statement or statement of operations, is a financial report that provides a summary of a company’s revenues, expenses, and profits/losses over a given period of time.  The P&L statement shows a company’s ability to generate sales, manage expenses, and create profits. It is prepared based on accounting principles that include revenue recognition, matching, and accruals, which makes it different from the cash flow statement.
Understanding and using a P&L statement, here is a primer on a few basic terms you will need to know. First, "net income" means the income your company makes after all of its expenses are deducted. If your P&L statement lists a low net income because the expenses are high, banks will not want to extend financing to you.

 

What are the Key Features of Profit and Loss Account ?

  • The P&L statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period.
  • The P&L statement is one of three financial statements every public company issues quarterly and annually, along with the balance sheet and the cash flow statement.
  • It is important to compare P&L statements from different accounting periods, as the changes in revenues, operating costs, R&D spending, and net earnings over time are more meaningful than the numbers themselves.
  • Together with the balance sheet and cash flow statement, the P&L statement provides an in-depth look at a company's financial performance.

What are the Advantages for preparing a Profit & Loss Account ?

P&L statements are important, because many companies are required by law or association membership to complete them. A P&L statement also helps a company's management team (including its board of directors) to understand the business's net income, which may be helpful in decision-making processes. For example, a business owner may consider whether his or her company is bringing in enough of a profit to justify renovating their building or expanding in other ways.

You will also need to furnish a P&L if you are applying for a small business loan or if you're seeking funding from investors. Lenders and investors will evaluate your net income and operating income against the expenses, debts, and taxes to ensure your business is viable and worth providing financial assistance to.

What are the components for Profit and Loss Account ?

A company’s statement of profit and loss is portrayed over a period of time, typically a month, quarter, or fiscal year.

The main categories that can be found on the P&L include:
  • Revenue (or Sales)
  • Cost of Goods Sold (or Cost of Sales)
  • Selling, General & Administrative (SG&A) Expenses
  • Marketing and Advertising
  • Technology
  • Interest Expense
  • Taxes
  • Net Income

How to Analyze Profit & Loss Account ? 

One of the main objective of a preparing P & L is to  analyze the P&L of a company in order to make recommendations about the financial strength of the company, attractiveness of investing in it, or acquiring the entire business.

Examples of P&L statement analysis include:
  • Comparing year-over-year numbers (horizontal analysis) as well as industry benchmarking
  • Looking at margins: gross profit margin, EBITDA margin, operating margin, net profit margin
  • Trend analysis: are metrics improving or deteriorating
  • Rates of return: return on equity (ROE), return on assets (ROA)
  • Valuation metrics: EV/EBITDA, P/E ratio, Price to Book, etc

Why Tax my Tax ?

We get your Accounting   done  Monthly / Weekly / Annually with complete online support. You need not to step outside your home and we guide you to enter into the business world hasselfree. At Tax My Tax , our team helps you to understand the concept of Profit and Loss  and help you to arrange the right documention done for the Accounitng  . Tax My Tax has a TAT for Profit and Loss is 3 working days
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