Metrics & Analytics

P And L Statement

Definition

What is P And L Statement?

A Profit and Loss Statement (P&L) is a financial document summarizing an organization's revenues, costs, and expenses over a period to show whether the business generated a profit or incurred a loss.

Featured snippet

A financial statement summarizing revenues, costs, and net profit or loss over a period.

In Practice

How P And L Statement works?

A Profit and Loss (P&L) statement — also called an income statement — summarizes revenues, costs, and expenses over a period to show the organization's financial profitability. For HR professionals in business partner roles, P&L literacy is a foundational business acumen requirement: understanding how labor cost appears on the P&L (in cost of goods sold for direct labor, and in operating expenses for HR, management, and administrative staff) enables more productive conversations with business leaders about headcount decisions, investment justification, and the financial implications of talent strategy choices. HRBPs who cannot read and interpret the P&L of the business unit they support are limited in their ability to connect people decisions to the business outcomes their leaders are accountable for.

By the numbers

Key Statistics

What the research says about employee engagement.

45%

HR business partners rated as strategic by their business leader counterparts score 45 percent higher on commercial and financial literacy assessments compared to those rated as primarily administrative — making P&L and financial statement comprehension a measurable competency differentiator for HRBP effectiveness.

Labor cost typically appears across multiple P&L line items simultaneously — wages in COGS, benefits in operating expenses, training in SG&A — making the full labor cost picture invisible from any single line and requiring HR to construct a comprehensive labor cost view that finance reporting may not provide in a consolidated format.

22%

SHRM research shows that only 22 percent of HR professionals feel confident interpreting their organization's P&L — a capability gap that directly limits HR's ability to make financially grounded business cases for people investment and to earn strategic partnership status with business leadership.

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Also known as

Synonyms and Translations

Other ways this term appears across industries and languages.

Synonyms

Profit and Loss Statement

Income Statement

P&L Report

Statement of Operations

Translations

🇸🇦

Arabic

بيان الأرباح والخسائر

🇫🇷

French

Compte de résultat

🇮🇳

Hindi

लाभ और हानि विवरण

🇵🇰

Urdu

منافع و نقصان بیان

🇵🇭

Tagalog

P at L Statement

People may ask

People May Ask

Common questions about employee engagement.

What is a P&L statement?

A P&L statement is a financial report showing total revenue, cost of goods, operating expenses, and the resulting net profit or loss for a specific time period.

How does HR use the P&L statement?

HR uses it to understand labor cost as a percentage of revenue, justify workforce investments, and align people strategy with the financial performance of the business.

What is the difference between a P&L and a balance sheet?

A P&L shows performance over a time period. A balance sheet shows the financial position at a single point, including assets, liabilities, and equity.

What are the main components of a P&L statement?

Revenue, cost of goods sold, gross profit, operating expenses, EBITDA, and net income or loss are the core components shown in a P&L statement.

Why should HR professionals understand the P&L?

Understanding P&L allows HR to connect people decisions to business outcomes, demonstrate ROI, and have credible conversations with finance and senior leadership.