Profit and Loss Statement Maker

What a simple P&L worksheet calculates

The IRS Internal Revenue Manual describes a profit and loss statement as a report of an entity’s revenues and expenses for an accounting period that summarises net income or net loss. This worksheet follows that high-level structure with explicit, user-entered lines. It does not import transactions, classify accounts, choose an accounting method, or decide which costs belong in a tax return.

The calculation order is:

1. Revenue subtotal = the sum of valid revenue lines.
2. COGS subtotal = the sum of valid cost-of-goods-sold lines.
3. Gross profit = revenue subtotal − COGS subtotal.
4. Operating income = gross profit − operating expenses.
5. Net income = operating income + other income − other expenses.

The IRS Publication 334 illustration shows the same important gross-profit relationship: net receipts less cost of goods sold equals gross profit. It also explains that service businesses may not need a cost-of-goods-sold calculation when merchandise is not an income-producing factor. Select classifications that match your records and ask a qualified accountant about the right treatment for your business.

Worked example

Suppose a period has product sales of $12,000, service revenue of $3,000, materials of $4,000, contract delivery costs of $1,000, rent of $2,000, software of $500, other income of $100, and other expenses of $250. Revenue is $15,000 and COGS is $5,000, so gross profit is $10,000. Operating expenses are $2,500, so operating income is $7,500. Net income is $7,350 after adding $100 and subtracting $250.

The IRS Publication 583 notes that good records help prepare accurate financial statements and that an income statement shows business income and expenses for a period. The IRS recordkeeping guidance also points to records such as invoices, receipts, paid bills, and statements as support for business entries. Keep the source documents and review this worksheet against them. A printed summary is not a substitute for your books, records, tax forms, or professional review.

Practical limits

Amounts must be non-negative numbers with up to two decimal places and no more than 12 digits before the decimal. Blank rows are ignored, while a partly completed row is flagged before printing or downloading. The tool does not calculate taxes, depreciation, inventory adjustments, margins, cash flow, balance-sheet accounts, or currency conversion. Use the browser’s print dialog if you want a PDF, and review the printed result before sharing it.