A Profit and Loss statement (P&L) is a summary of a company’s income, expenses, and profits/losses over a given period of time. It allows businesses to measure their profitability, track all sources of revenue, monitor costs and expenses, and gain insight into the financial performance of their business. An Income Statement is similar to a P&L in that it records revenues, expenses, and profits. However, an Income Statement takes into account both the current and future earnings potential for a business, which enables more accurate forecasting of future profits. By combining information from both a P&L and Income Statement, businesses can gain a comprehensive understanding of their overall financial health.