StocksResult
📝 What is Profit & Loss Statement?
📃 What is Profit & Loss Statement?
Imagine you opened your dream burger shop 🍔 called "Super Snack Corner". After 1 month, you want to know:
"Did I earn profit or suffer loss?" 😟
So you pick a notebook 📓 and write:
✅ How much you earned by selling burgers = Income
❌ How much you spent on buns, gas, salary, rent = Expenses
And the final result is:
💰 Profit = Income – Expenses (if you earned more)
💸 Loss = Expenses – Income (if you spent more)
This simple sheet of income and expenses is called:
👉 Profit & Loss Statement (P&L Statement) or Income Statement
🎯 Why is P&L Important?
For every company 🏢 (whether big like a car company 🚗 or small like your burger shop 🍔):
✔️ P&L tells how much money the business made or lost in a year or quarter.
✔️ Without P&L — you’ll never know if your business is healthy or dying slowly. 😱
🔍 What does P&L contain?
1️⃣ Income:
Like in your burger shop:
✅ ₹10,000 earned by selling burgers
✅ ₹2,000 earned from selling cold drinks
👉 Total Income = ₹12,000
For a company, this income comes from:
✔️ Selling products/services
✔️ Extra money earned (like interest or rent)
2️⃣ Expenses:
Like your burger shop spends on:
❌ ₹4,000 for buns, cheese, veggies 🥬
❌ ₹2,000 on worker salary 👨🍳
❌ ₹1,000 on stall rent 🏠
❌ ₹500 for gas cylinder 🔥
👉 Total Expenses = ₹7,500
For a company, expenses include:
✔️ Raw materials
✔️ Salaries
✔️ Rent
✔️ Electricity
✔️ Transport
3️⃣ Profit or Loss?
Now calculate:
💡 Income ₹12,000 – Expenses ₹7,500 = ₹4,500 Profit 🎉
But if expenses were ₹15,000...
💔 Income ₹12,000 – Expenses ₹15,000 = ₹3,000 Loss 😢
This is the final "bottom line" of the company — whether it made money or not!
🎨 Funny Example:
Imagine your friend Bittu opens a mobile cover shop 📱:
✔️ Sells covers worth ₹20,000
✔️ Spends ₹10,000 on covers, ₹5,000 on rent, ₹2,000 on tea & snacks 🍵
Profit or Loss?
Total Expenses = ₹17,000
Income = ₹20,000
👉 Profit = ₹3,000 (Bittu party karega! 🎉🎉)
🔥 What Should Investors Check in P&L?
✔️ Sales Growth 📈: Every year sales must rise like your pocket money! 😁
✔️ Net Profit 💰: After all expenses, is the company saving enough?
✔️ Expenses Control 🚦: Is the company wasting money like water 💦 or saving like grandma? 😆
🧨 Dangerous Signs (Red Flags)
❌ Sales falling every year 😨
❌ Big losses for many quarters 😢
❌ Uncontrolled expenses (like buying Ferrari to deliver samosas!) 🚗😆
📌 Terms You Should Know (Simple Style)
✨ Revenue (Income) = Total money earned from customers
✨ Expenses = Total money spent to run the business
✨ Operating Profit = Income – Day-to-day expenses
✨ Net Profit = Income – All expenses (tax, interest, etc.)
🧠 Shortcut Gyaan:
If Net Profit is high = Company is minting money! 💵
If Net Profit is low/negative = Careful! 😨
🚀 Final Gyaan for Investors
Before investing in any stock:
✅ Check Profit & Loss Statement of last 3 years
✅ See if sales and profit are rising 🌱
✅ Avoid companies showing losses again and again 😬
Remember:
"No profit = No party 🎉,
Big profit = Big party 🎊!"
🎯 Simple Summary
✔️ P&L shows the story of how a company earns and spends
✔️ Profit = Good sign! 👍
✔️ Loss = Risky, be alert! ⚠️
✔️ Keep eye on rising sales and controlled expenses
🎈 Fun Tip
If company’s P&L is bad — run away faster than your mom with a stick! 🏃♂️💨😂
Stay smart. Stay informed.
Understand P&L = Become a wise investor! 💹🧠