202 - Explaining a Profit & Loss
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In today's episode. I am going to be explaining to you all about the profit and loss statement, so what a P&L is, Um, how they work and in order to do that, I'm actually going to be walking you through an excerpt of our Profit Rx textbook.
So a P&L, or a profit and loss is also often referred to as an income statement. That's like the more official term for most accountants, but I like P&L, because it's shorter to say, and also, profit and loss is pretty clear as to what it is that we're covering a profit.
A Profit & Loss, or P&L for short, is created by and for your own company. It's typically not submitted anywhere. The P&L shows a snapshot of income, expenses and profit. If prepared correctly, it shows your self-employment income from that business. So in our book I have a snaps shot of a P&L. I'm going to kind of describe it to you, since obviously you cannot see it.