Your P&L statement serves as a baseline for creating your business budget. A negative number indicates that you’re in the red and, therefore, burning a hole in your pocket. A positive number indicates that you’re in the black and, therefore, making money. This is commonly referred to as the net present value NPV. When you add up all of your income and then subtract your total expenses, you should have a positive or negative number. A P&L statement is a high-level overview that shows whether your organisation is profitable or in the red. Now you can better understand your business finances by creating a profit and loss (P&L) statement. You’ve accounted for your income and fixed, variable, and emergency expenses.
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