p&l
P&L is a financial summary showing all the money coming in, going out, and left over.
In plain English
Aunty Bisi sits behind her fabric stall in Balogun market every Saturday evening with a battered blue notebook.
On the left page, she writes down every naira from sold lace and cotton wrappers. On the right page, she notes the cost of buying wholesale, the market levies, the generator fuel, and the cold malt she bought for her apprentice.
What remains at the very bottom tells her if the week made sense or if she simply spent six days entertaining passersby.
That little blue book is her profit and loss statement, known everywhere in corporate boardrooms as the P&L.
Big corporations like Dangote Cement or a small food truck in Peckham do the exact same exercise, only on glossy spreadsheets with fancy headings.
They list total sales at the top, deduct the cost of goods, wipe off bills like rent and staff pay, and see what remains before paying tax.
A healthy P&L gives you peace of mind because it shows whether you are actually building wealth or running an expensive charity.
After subtracting ₦700,000 in expenses from ₦1,200,000 sales, Tunde’s P&L showed ₦500,000 profit.
Questions people ask
Is a P&L the same as an income statement?
Yes, both names refer to the exact same document tracking income and spending over time.
How often should a business prepare a P&L?
Reviewing it monthly helps you catch heavy waste early before it harms your trade.
Does a positive P&L mean money is in the bank?
Not always, because customers who owe you count as revenue before they pay cash.
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