Profit & loss statement generator

Gross profit is revenue minus the direct cost of the goods sold or service delivered. Net profit is what remains after all other operating costs - rent, salaries, marketing, transport, and other expenses. Gross profit says your product works; net profit says your whole business works.

Monthly is the standard cadence for a small business. A monthly P&L catches a creeping cost or falling margin while you can still act on it, and twelve monthly statements build an honest annual picture.

Work from top to bottom: can you raise revenue or prices? Is the cost of stock or service delivery too high? Are operating costs cutting too deep? Fix the largest line first, then re-run the statement next month to confirm the change moved the bottom line.

It is a clear management summary of your month, but tax returns have their own rules and formats. Use this statement to understand your business, and prepare statutory accounts and tax figures with your records or an accountant.

Gross profit is net sales minus the cost of stock or service delivery for the period. In the tool that is the sales income, less any refunds, minus what the goods you sold or the service you delivered actually cost you.

Operating costs are the business expenses that keep you running beyond the goods themselves - the tool lists rent, salaries, and marketing as examples, with a separate line for other costs. Transport, utilities, and phone or internet bills also belong here.

Refunds and returns are entered separately and subtracted from sales income before anything else is calculated. That gives net sales, which is the real money you keep after unhappy customers are made whole - so a month with heavy returns shows a smaller revenue base.

Net sales is your total sales income minus refunds and returns for the period. If you sold KSh 200,000 but gave back KSh 5,000 in refunds, net sales is KSh 195,000 - and it is this figure the statement starts from for gross and net profit.

When costs exceed income, the statement shows a Net loss line instead of Net profit, displaying the amount as a positive figure with a red background so the loss stands out. It is a signal to work through revenue and costs line by line next month.