Definitions of terms
To make sure you understand financial language that appears on a typical P&L, drag each term to the correct definition.
Gross Profit Margin
Overhead, or Fixed Expenses
Other income or expenses
Net income (after taxes)
Money you receive in payment for your products or services.
Expenses that rise or fall based on your sales volume. Also known as Variable Expenses.
Amount left when you subtract operating expenses from revenues. Also known as Operating Margin.
Costs that don’t vary much monthly or rise or fall with sales. Possible examples: rent, insurance.
Money received after deducting operating and overhead expense.
Money related to a business’ finances, for example interest earned on savings or paid on loans.
Money earned before federal and state governments take their share.
Money paid to federal and state governments.
The profit earned in the period minus all expenses. The final amount on most P&Ls.
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