Example profit and loss statement

What is a profit and loss statement?

The profit and loss statement is a summary of a businesss income and expenses over a specific period. It
should be prepared at regular intervals (usually monthly and at financial year end) to show the results of
operations for a given period.
Calculating the cost of goods sold varies depending on whether the business is retail, wholesale,
manufacturing, or a service business. In retailing and wholesaling, computing the cost of goods sold during
the reporting period involves beginning and ending inventories. This, of course, includes purchases made
during the reporting period. In manufacturing, it involves finished-goods inventories, plus raw materials
inventories, goods-in-process inventories, direct labour, and direct factory overhead costs.
In the case of a service business, the revenue is being derived from the activities of individuals rather than
the sale of a product and hence the calculation of cost of goods sold is a smaller task due to the low-level
use of materials required to earn the income.
The image below shows how profit and loss are calculated.
Tip: Regularly produce profit and loss information (monthly) and compare against previous
months activities to ensure your profit expectations are being met.

Hint: Only those businesses that have goods (products) to sell will use the calculation of cost of
goods sold
Joes Motorbike Tyres
Profit and Loss Statement
For the Period ended Year One
Income
Sales 52000
Total Sales 52000
Cost of Goods Sold
Opening Stock $ -
Stock Purchases 34320
Less Closing Stock 3120
Total Cost of Goods Sold(COGS) 31200
Gross Profit 20800
Expenses
Advertising 500
Bank Service Charges 120
Insurance 500
Payroll 13000
Professional Fees (Legal, Accounti 200
Utilities & Telephone 800
Other: Computer Software 480
Expenses total 15600
Net Profit before Tax 5200

Note; Cost of Goods Sold calculation:

Towards the end of the year, Joe manages to purchase 100 more tyres on credit from his sup
order in the new year. This leaves him with $3,120 of stock on hand at the end of the year.
Joes Cost of Goods Calculation
Opening Stock Nil

Add Stock Purchased during the year $34,320

Equals Stock available to sell $34,320

Less Stock on hand at end of year $3,120

Cost of Goods Sold $31,200
Where a business is a service business, that is, you are selling services not goods or product
profit and loss statement will generally not have a cost of goods sold calculation. In some ins
where labour costs can be directly attributed to sales, then you may consider including these
cost of goods (services) sold.
 ( 1,000 tyres @ $ 52 each)

( See note below)

e tyres on credit from his supplier for an

and at the end of the year.

(1100 tyres @ 31.20 each)

(100 tyres @ 31.20 each)

services not goods or products, then the
sold calculation. In some instances,
may consider including these costs as a
PRO FORMA CASH STATEMENT
2017

MONTH Pre Operations January February March April May June July
A CASH INFLOWS
Capital (Cash) 8000
Loan 50 000
Cash sales 80000 80000 105000 90000 120000 100000 85000
Collections of Accounts Receivable 0 0 0 0 0 0 0
TOTAL CASH INFLOWS 58000 80000 80000 105000 90000 120000 100000 85000
B CASH EXPENDITURE
1 Pre operating & Incorporation Expenditure 12760
2 Sales & Marketing Expenditure 3965 3965 3965 3965 3965 3965 3965
3 General & Administrative Expenditure 10294 10294 10294 10294 10294 10294 10294
4 Operations & Technical Expenditure 21069 21069 21069 21069 21069 21069 21069
5 Other Expenditure 364
6 Fixed Asset Expenditure 14713
7 Hire Purchase
Principal 250 250 250 250 250 250 250
Interest 250 250 250 250 250 250 250
8 Loan
Pricipal 676 676 676 676 676 676 676
Interest 386 386 386 386 386 386 386
C TOTAL CASH OUTFLOWS 27473 37254 36890 36890 36890 36890 36890 36890
D Excess/Defisit (A-B) 30527 42746 43110 68110 53110 83110 63100 48110
E Beginning Cash Balance 0 30527 42746 43110 68110 53110 83110 63100
F Ending Balance 30527 73273 85856` 111220 121220 136200 146220 111220

2018
MONTH January February March April May June July August
A CASH INFLOWS
Capital (Cash)
Loan
Cash sales 103583 103583 103583 103583 103583 103583 103583 103583
Collections of Accounts Receivable 0 0 0 0 0 0 0 0
TOTAL CASH INFLOWS 103583 103583 103583 103583 103583 103583 103583 103583
B CASH EXPENDITURE
1 Pre operating & Incorporation Expenditure
 2 Sales & Marketing Expenditure 3965 3965 3965 3965 3965 3965 3965 3965
3 General & Administrative Expenditure 10294 10294 10294 10294 10294 10294 10294 10294
4 Operations & Technical Expenditure 21069 21069 21069 21069 21069 21069 21069 21069
5 Other Expenditure 364
6 Fixed Asset Expenditure
7 Hire Purchase
Principal 250 250 250 250 250 250 250 250
Interest 250 250 250 250 250 250 250 250
8 Loan
Pricipal 747 747 747 747 747 747 747 747
Interest 315 315 315 315 315 315 315 315
C TOTAL CASH OUTFLOWS 37254 36890 36890 36890 36890 36890 36890 36890
D Excess/Defisit (A-B) 66329 66693 66693 66693 66693 66693 66693 66693
E Beginning Cash Balance 717483 66329 66693 66693 66693 66693 66693 66693
F Ending Balance 783812 133022 133386 133386 133386 133386 133386 133386

2019
MONTH January February March April May June July August
A CASH INFLOWS
Capital (Cash)
Loan
Cash sales 104121 104121 104121 104121 104121 104121 104121 104121
Collections of Accounts Receivable 0 0 0 0 0 0 0 0
TOTAL CASH INFLOWS 104121 104121 104121 104121 104121 104121 104121 104121
B CASH EXPENDITURE
1 Pre operating & Incorporation Expenditure
2 Sales & Marketing Expenditure 3965 3965 3965 3965 3965 3965 3965 3965
3 General & Administrative Expenditure 10294 10294 10294 10294 10294 10294 10294 10294
4 Operations & Technical Expenditure 21069 21069 21069 21069 21069 21069 21069 21069
5 Other Expenditure 364
6 Fixed Asset Expenditure
7 Hire Purchase
Principal 250 250 250 250 250 250 250 250
Interest 250 250 250 250 250 250 250 250
8 Loan
Pricipal 825 825 825 825 825 825 825 825
Interest 237 237 237 237 237 237 237 237
C TOTAL CASH OUTFLOWS 37254 36890 36890 36890 36890 36890 36890 36890
D Excess/Defisit (A-B) 66867 67231 67231 67231 67231 67231 67231 67231
E Beginning Cash Balance 799956 66867 67231 67231 67231 67231 67231 67231
F Ending Balance 866823 134098 134462 134462 134462 134462 134462 134462
 August September October November December

60000 60000 100000 120000 130000

0 0 0 0 0
60000 60000 100000 120000 130000

3965 3965 3965 3965 3965

10294 10294 10294 10294 10294
21069 21069 21069 21069 21069

250 250 250 250 250

250 250 250 250 250

676 676 676 676 676

386 386 386 386 386
36890 36890 36890 36890 36890
23110 23110 63100 83110 93110
48110 23110 23110 63100 83110
71220 46220 86210 146210 176220

September October November December

103583 103583 103583 103583

0 0 0 0
103583 103583 103583 103583
 3965 3965 3965 3965
10294 10294 10294 10294
21069 21069 21069 21069

250 250 250 250

250 250 250 250

747 747 747 747

315 315 315 315
36890 36890 36890 36890
66693 66693 66693 66693
66693 66693 66693 66693
133386 133386 133386 133386

September October November December

104121 104121 104121 104121

0 0 0 0
104121 104121 104121 104121

3965 3965 3965 3965

10294 10294 10294 10294
21069 21069 21069 21069

250 250 250 250

250 250 250 250

825 825 825 825

237 237 237 237
36890 36890 36890 36890
67231 67231 67231 67231
 67231 67231 67231 67231
134462 134462 134462 134462
 Total Cash Inflow Total Cash Outflows Ending Balance
2017 1188000 470517 749734
2018 1243000 443044 799956
2019 1249450 443044 806406

Total Sales Total expenditure Net Income

2017 1188000 255,480 723,209
2018 1243000 282,377 779,884
2019 1249450 307,841 794,760
Pro-forma Income Statement
Food Valet.Co
Pro-Forma Income Statement For The Year Ended 31 December
Years 2017 2018 2019
Sales 1,188,000 1,243,000 1,249,450
Less cost of sales 14,099 31,998 32,256
Gross Income 1,173,901 1,211,002 1,217,194
Expenditure
Pre operating & incorporation expenditure 12,760
General and administrative expenditure 123,528 129,704 142,674
Sales and marketing expenditure 47,580 49,959 54,955
Operation and Technical expenditure 252,828 265,469 292,016
Depreciation of fixed asset 6,361 6,361 6,361
Other expenditure
443,057 451,493 496,006
Operating income 730,844 759,509 721,188
Interest on hire purchase 3,000 3,000 3,000
Interest on loan 4,635 3,785 2,827
Net income before tax 723,209 752,724 715,361
Income tax 0 0 0
Net income after tax 723,209 752,724 715,361

Note 1
Cost of sales
Opening inventory 17,113 18,824
Add total purchase 31,212 33,709 37,080
Carriage inward &duty
Less ending inventory 17,113 18,824 21,648
14,099 31,998 32,256
Pro-forma Balance Sheet

Food Valet.Co
Balance Sheet Statement For The Year Ended 31 December
Assets 2017 2018
Non current assets
Other fixed asset 38,352 31,991
Deposit 6,000 6,000
44,352 37,991

Current assets
Inventory 17,113 18,824
Cash balance 749734 799956
766,847 818,780

Total Assets 811,199 856,771

Owner's equity
Capital 8,000 8,000
Accumulated income 723,209 779,884
731,209 787,884
Long term liabilities
Loan balance 41877 32924
Hire purchase balance 27000 24000
68,877 56,924

Current liabilities
Loan due within current year 8,113 8,963
Hire purchase due within 3,000 3,000
11,113 11,963

TOTAL EQUITIES AND LIABILITIES 811,199 856,771

December
2019

25,630
6,000
31,630

21,648
806406
828,054

859,684

8,000
794,760
802,760

23022
21000
44,022

9,902
3,000
12,902

859,684
 Pre- Operating and Working Capital

Pre-Operating & Incorporation Costs (one-off)

Development cost
Business incorporation 60
Deposit (rent, utilities, etc.)
Other pre-operating & incorporation costs
Sales & Marketing Costs (monthly)
Flyers and Pamplets
Salaries, Wages, EPF & SOCSO
General & Administrative Costs (monthly)
Salaries, Wages, EPF & SOCSO(admin,chief accountant, general manager

Overhead cost (water,electricity,telephonebill,internet)

Building Rental
Operations & Technical Costs (monthly)
Purchase of Raw Materials/Goods: Main Materials/Goods
Purchase of Raw Materials/Goods: Materials/Goods 1
Purchase of Raw Materials/Goods: Materials/Goods

Salaries, Wages, EPF & SOCSO

other expenses overhead
Other Expenditure (annually)
Stationery
Total Pre-Operations & Working Capital Expenditure
 RM
400
60
6000
6300

100
3865

7854

440
2000

650
403.2
695.4
376.5
75.6
17611
400

364
47595
Project Implementation Cost and Sources of Finance

Capital Expenditure
Building
Office equipment
Furniture and fitting
Vehicle
Machine
working capital (2 months)
Sales and Marketing cost
General and Administrative cost
Operation & Technical cost
Pre operating & Incorporation Cost (one off)
Other Expenditure (annually)
o Provision for Contingencies (5%)
Total
Cost (RM)

9200
3800
30 000
1713

7930
20588
42137
12760
364
6425
134917
Sources of Funds
Cash
Cash
Cash
Hire Purchase
Cash

Cash
Cash
Cash
Cash
Cash
Cash
134917
 SUMMARY
Tahun Total Assets Total Liabilities Total Equities
2017 811,199 68,877 731,209
2018 856,771 56,924 787,884
2019 859,684 44,022 802,760

Curent Ratio, = current asset

liability

766,847
11,113
69 times

Gross profit = Gross profit

Sales

1,173,901
1,188,000
99 %

Net profit margin = Net profit after tax

Sales

723,209
1,188,000
61 %

Return on Asset = Net profit af ter tax

Total Asset

723,209
811,199
89 %

Return on equity = Net profit after tax

Total Equity

723,209
731,209
99 %

Time Interest Earned = Earning before interest and tax

Interest expenses

723,209
7,632

95 times