A Profit and Loss Statement, also known as an income statement, is a financial report that summarizes a company's revenues and expenses over a specific period. It helps businesses understand how much money they made or lost during that time. By comparing total income to total expenses, the statement reveals the company's profitability, which is crucial for making informed financial decisions. This statement typically includes key components such as revenue, cost of goods sold, and operating expenses. By analyzing these figures, business owners can identify trends, manage costs, and strategize for future growth, ensuring the long-term success of their company.