Profit and Loss refers to a financial statement that summarizes the revenues, costs, and expenses incurred during a specific period. It helps businesses understand their financial performance by showing whether they made a profit (income exceeds expenses) or a loss (expenses exceed income). This statement typically includes key components such as revenue, cost of goods sold, and operating expenses. By analyzing these figures, companies can make informed decisions about budgeting, pricing, and future investments to improve their financial health.