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Free Profit and Loss Statement Template

Fill in revenue, cost of goods sold and expenses, and the statement works out gross profit, operating income, net profit and the margins for up to three periods side by side. Print it, save it as a PDF or download a CSV. It also works as an income statement template.

What goes on a profit and loss statement

  • Revenue

    Everything you billed in the period: sales, service fees, commissions earned. Returns, discounts and allowances come off to give net revenue.

  • Cost of goods sold

    What it cost to deliver what you sold: goods bought for resale, materials, subcontractors, commissions you pass to sub-agents.

  • Gross profit and gross margin

    Net revenue minus cost of goods sold, and that as a share of net revenue. It tells you whether the work itself pays.

  • Operating expenses

    The cost of running the business whatever you sell: salaries, rent, marketing, software, travel, insurance, professional fees.

  • Operating income

    Gross profit minus operating expenses: what the business earns from its main activity, before interest and taxes.

  • Other items, interest and taxes

    Income and costs outside the main business, interest on loans and income taxes. What is left is net profit, or net loss.

Single-step vs multi-step income statement

A company can prepare its income statement in a multi-step format or a simple one, also known as single-step. The single-step format puts all revenue in one group and all expenses in another and subtracts once. The multi-step format separates the cost of goods sold from operating expenses, so it shows gross profit, then operating income, then net income.

This template uses the multi-step layout, in the order the SEC's beginners' guide walks through an income statement: revenue, returns and allowances, cost of sales, gross profit, operating expenses, operating income, interest, income tax and net profit. If you want a single-step statement, leave cost of goods sold empty and list every cost under operating expenses.

This is a template for your own records and planning, not accounting or tax advice. Your accountant decides how items are classified on the statements you file or give to a lender.

Sources: OpenStax, Principles of Accounting, 6.6; SEC, Beginners' Guide to Financial Statements; FDIC and SBA, Money Smart for Small Business, Module 8 (PDF).

How to read the margins

Each margin is a profit line divided by net revenue. A sales agency with $250,000 of commission income that pays $50,000 to sub-agents has $200,000 gross profit, an 80% gross margin. With $150,000 of operating expenses, operating income is $50,000, a 20% operating margin. After $3,000 of interest and $9,000 of income taxes, net profit is $38,000, a 15.2% net margin.

Gross margin moves with pricing and what you pay to deliver; operating margin moves with overheads; net margin includes financing and tax. When net profit falls, compare the three across two or three periods side by side to see which line moved.

Tips for a P&L you can use

  • Same lines every period

    Keep the line names and what goes in each the same from month to month, or the comparison means nothing.

  • Cash or accrual, not both

    Count revenue when you are paid or when you invoice, and expenses the same way, consistently. Your accountant can tell you which you report on.

  • Owner's draw comes out of profit

    The FDIC and SBA course lists owner's draw with loan repayments among what net profit pays for, so it is not an operating expense line. Note it under the statement instead.

  • Compare, then ask why

    Two or three periods side by side show which line moved. The answer is usually in the deals behind the revenue.

More for agency owners and sales leaders: staffing sales, field sales management, sales KPIs worth tracking.

The numbers explain last quarter. The conversations explain the next one.

Revenue on a P&L comes from customer meetings: what they asked for, what they pushed back on, what you promised. ParrotNotes records those meetings and writes the summary and action items, so the next forecast rests on what customers said, not on what you remember. Free for 100 minutes of recording a month.

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