A profit and loss statement is a very helpful tool if used right for your business. It is a financial statement with the revenue, costs, and expenses relative to a specific time period in your business. A P&L (profit and loss) statement essentially gives you the marketability and worth of your company, which is essential if you ever wish to sell your business. But it is equally important even if you're running your business and not interested in selling it.
Having a profit and loss statement can help you operate your business in several ways:
Having a P&L statement from each year will help give you a snapshot of those years and identify different trends and other up or down cycles.