Income Statement

The profit and loss statement is the table that answers a simple question: has my company made or lost money over a certain period of time? We take the money that came in (revenue), subtract the money that was spent (expenses), and what remains is the profit, which is used to calculate tax.

Brief

Income (money coming in) minus expenses (money going out) over a period = profit or loss
It was previously called the "profit and loss statement";
Profit serves as the basis for calculating corporation tax.
This is your profitability dashboard (are you making money?)

Why does this matter?

Think of your profit and loss statement like the score of a game: at the end of the period, did you win (profit) or lose (loss)? For example, you sell $250,000 worth of goods, pay $100,000 in goods, and have $120,000 in expenses (rent, salaries); you're left with $30,000 in profit. Reviewing it monthly gives you early warning if your profits are shrinking. Bankeo connects you with a free, verified accountant/CPA who helps you understand your statement and improve your margins (what's left after expenses), and we're there to support you every step of the way.

Frequently asked questions

What exactly is a profit and loss statement?

It's a table that takes all the money entered (income), removes all the money spent (expenses) and shows you whether there is a profit or a loss over a period, for example a year.

What is the difference with the balance sheet?

The income statement covers a period (for example, a year) and measures whether you made money. The balance sheet, on the other hand, is a snapshot at a single date of what the company owns and owes.

Who can help me understand my numbers?

An accountant transforms these figures into concrete decisions. Bankeo presents you with a verified accountant/CPA free of charge, often within 48 hours, and we remain by your side throughout the process.