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Choose a time frame. List your business revenue for the time period, breaking the totals down by month. Calculate your expenses. Determine your gross profit by subtracting your direct costs from your revenue. Figure out if you're making money.
This profit and loss (P&L) statementProfit and Loss Statement (P&L)A profit and loss statement (P&L), or income statement or statement of operations, is a financial report that provides a summary of a template summarizes a company's income and expenses for a period of time to arrive at its net earnings for the period.
First, show your business net income (usually titled "Sales") for each quarter of the year. Then, itemize your business expenses for each quarter. Then show the difference between Sales and Expenses as Earnings.
What is a profit and loss statement? A profit and loss (or income) statement lists your sales and expenses. It tells you how much profit you're making, or how much you're losing. You usually complete a profit and loss statement every month, quarter or year.