A Profit and Loss Statement, more commonly referred to as an income statement, is an important financial document used to report the net profit or loss of a business over a given period. It details the overall financial performance of a business over a distinct period of time, such as one month, one quarter or one year. The goal of this document is to give business owners and stakeholders insight into their businesses’ profitability and identify areas of gain or loss according to categories like sales revenue, expenses, and cost of goods sold. By understanding what goes into each category, organizations can create goals and strategies for improving their bottom line.