Profit and Loss

It might seem like a no-brainer to define just exactly what profit and loss are. Businesses that sell services and products generate profit from the sales of those products or services and from controlling the attendant costs of running the business. While some definitions limit ROI to profit on investments in such securities as bonds or stocks, many companies use this term to refer to long-term and short-term business results.

Businesses that sell services and products generate profit from the sales of those products or services and from controlling the attendant costs of running the business. While some definitions limit ROI to profit on investments in such securities as bonds or stocks, many companies use this term to refer to long-term and short-term business results. It's the job of the accounting and finance professionals to assess the profits and losses of a company. In a publicly held company, this profit is returned to the shareholders in the form of dividends.

It's the job of the accounting and finance professionals to assess the profits and losses of a company. In a publicly held company, this profit is returned to the shareholders in the form of dividends. Anything that's left over is profit.

Showing a profit, or a positive figure on the balance sheet, is of course the aim of every business. Economic trends and consumer behaviors change and it's not always possible to predict these and what income they'll have on a company's performance.