You know how much you sold last month. But after paying for stock, rent and salaries, how much did the business actually keep? A profit and loss statement — most people just say P&L — is the one page that answers that: everything that came in, everything that went out, and what is left at the bottom.
Your sales figure alone will not tell you: a shop can have its best selling month of the year and still end up with less money than it started with. Your bank balance will not tell you either — the money sitting there might be a customer’s deposit, or a supplier bill that has not left yet.
The P&L takes all of that out of the picture and shows what the selling itself actually produced. Below you can download a free Malaysian template in Excel, Word or PDF, see a completed example with real RM figures, and learn how every line is worked out.
Start where you need to
01. What a profit and loss statement is
Money comes into your business from sales. Two different kinds of cost come back out of it. First, what the goods you sold cost you to buy. Then, what it costs to keep the doors open at all — rent, salaries, electricity. Whatever is still there at the end is your profit.
A P&L is just those steps written down in a fixed order, with a name attached to each one. The plain meaning comes first below; the accounting name is only the label you will see printed on the form:
| In plain terms | The name on the form | What it tells you |
|---|---|---|
| Everything you sold | Revenue (also called turnover, or sales) | How busy the business was |
| What those goods cost you to buy | Cost of goods sold (COGS) | feeds the line below |
| What is left after paying for the goods | Gross profit | Whether your pricing works |
| The cost of keeping the shop open | Operating expenses | feeds the line below |
| What you actually keep | Net profit | Whether the whole business works |
The two profit lines are the useful part. A shop can buy well and price well — healthy gross profit — and still lose money because the rent is too high for the amount it sells. One number at the bottom would never show you that; two show you where the money went.
You will see P&L, income statement, statement of profit or loss, and in Malay penyata untung rugi. They all mean this document. Accountants prefer “income statement”; almost everyone running a business says “P&L”. Section 06 covers where the naming genuinely differs.
02. Download the free P&L template
Four files. All free, all editable, no sign-up. The Excel version does the arithmetic for you — gross profit, net profit and both margins calculate themselves as you type.
Live formulas for every subtotal, plus a second sheet that rolls all twelve months into one view with margins.
Excel ↓If you would rather type than use a spreadsheet, or you need to restyle it onto your letterhead.
Word ↓Blank, for printing and filling in by hand. Page 2 explains the four things that decide whether it comes out right.
PDF ↓The same form filled in for a real-shaped Malaysian business — the exact figures used in section 03.
Example ↓Every row that starts with “Less:” takes a positive number — the template subtracts it for you. Typing a minus sign in front of your sales returns will add them back to your revenue instead of taking them off.
03. Profit and loss statement example (Malaysia)
Here is a completed monthly P&L for a bicycle shop in Selangor. The business is not SST-registered, which is the ordinary case for a shop this size, so there is no SST line — section 12 covers when you would add one.
Kedai Basikal Laju Enterprise — for the month ended 31 July 2026. All figures in RM.
| Line | RM |
|---|---|
| Revenue | |
| Sales — bicycles | 68,400.00 |
| Sales — parts and accessories | 21,300.00 |
| Repair and service income | 8,750.00 |
| Less: Sales returns and discounts | (1,450.00) |
| Net revenue | 97,000.00 |
| Cost of goods sold | |
| Opening stock (1 July) | 42,000.00 |
| Add: Purchases during the month | 51,600.00 |
| Less: Closing stock (31 July) | (38,900.00) |
| Cost of goods sold | 54,700.00 |
| GROSS PROFIT | 42,300.00 |
| Gross margin | 43.6% |
| Operating expenses | |
| Salaries, EPF and SOCSO | 14,800.00 |
| Shop rental | 6,500.00 |
| Utilities (electricity, water, internet) | 1,240.00 |
| Transport and delivery | 980.00 |
| Marketing and advertising | 650.00 |
| Insurance | 420.00 |
| Repairs and maintenance | 380.00 |
| Bank and payment charges | 310.00 |
| Accounting and software | 290.00 |
| Other expenses | 430.00 |
| Total operating expenses | 26,000.00 |
| Operating profit | 16,300.00 |
| Less: Interest on borrowings | (900.00) |
| NET PROFIT BEFORE TAX | 15,400.00 |
| Net margin | 15.9% |
- The shop sold RM97,000 of bicycles, parts and repairs.
- Those goods cost RM54,700 to buy, so RM42,300 is left.
- Running the shop — rent, salaries, bills, loan interest — cost RM26,900, so RM15,400 is left.
- That RM15,400 is what the business actually made in July.
Now look at where it went. Buying and pricing are working — RM42,300 of the RM97,000 survives the cost of the goods. It is the running costs that eat two-thirds of that. So if this owner wants a better month, the answer is in the expense list, not in cutting prices.
04. Every line explained
| Line on the form | What it is, and what goes in it |
|---|---|
| Revenue (turnover, sales) | What the business sold — everything you invoiced or rang up. Not what you were paid: an invoice issued in July belongs in July even if the customer pays in September. |
| Sales returns and discounts | Sales that did not really happen — goods sent back, and discounts given after the sale. Taken off the top. |
| Opening stock | What you were carrying when the month began: the value of goods on your shelves on day one. |
| Purchases | What you restocked with during the month. |
| Closing stock | What did not sell: the value still on the shelves at the end — counted, not guessed. This is the number people skip, and skipping it is what makes a P&L wrong. |
| Cost of goods sold (COGS) | What the goods you actually sold cost you to buy. Opening stock + purchases − closing stock. |
| Gross profit | The money left from selling, before you pay to keep the business open. Net revenue − COGS. |
| Operating expenses | What it costs to be open at all, whether you sell anything or not: rent, salaries, utilities, transport, marketing, insurance, bank charges. |
| Operating profit | What the selling itself earned. Gross profit − operating expenses. |
| Interest on borrowings | The cost of money you borrowed. Kept separate because it is about how the business is funded, not how it sells. |
| Net profit before tax | The bottom line — what the business made this month, before any tax is worked out. Operating profit − interest. |
Money the owner takes out for personal use is drawings, not a business expense. It does not belong anywhere on the P&L. Putting it in the expense list makes your business look less profitable than it is — which matters the day you take the statement to a bank.
05. How to calculate a P&L: the three formulas
There are only three, and each one uses the answer from the one before it. Worked with the figures from section 03:
1. Cost of goods sold
Opening stock + purchases − closing stock
RM42,000 + RM51,600 − RM38,900 = RM54,700
2. Gross profit
Net revenue − cost of goods sold
RM97,000 − RM54,700 = RM42,300
Gross margin = 42,300 ÷ 97,000 = 43.6%
3. Net profit
Gross profit − operating expenses − interest
RM42,300 − RM26,000 − RM900 = RM15,400
Net margin = 15,400 ÷ 97,000 = 15.9%
The two percentages are what make the statement useful month after month. RM15,400 on its own tells you very little. “15.9%, down from 18.2% last month” tells you something is moving, and the gross profit line tells you whether it moved in buying and pricing or in running costs.
If your sales, stock and expenses are already being recorded as they happen, the statement can simply be produced from them instead. Section 10 shows how that works. The rest of this guide is the manual method — worth understanding either way, because it is what the software is doing for you.
06. P&L vs balance sheet vs income statement
Three names get confused constantly. Two of them are the same document; the third is a genuinely different one.
| Profit and loss statement | Income statement | Balance sheet | |
|---|---|---|---|
| Is it different? | Same document, two names | A different document | |
| What it covers | A period of time — a month, quarter or year | The same | A single moment — one date |
| What it shows | Earned and spent, ending in profit or loss | The same | What you own and what you owe on that date |
| The question | Did we make money? | The same | What is the business worth, and what does it owe? |
| Who says it | Business owners, banks, everyday use | Accountants, formal accounts | Everyone |
| In Malay | Penyata untung rugi | Penyata pendapatan | Kunci kira-kira |
The short way to hold it: a P&L is a video of the month; a balance sheet is a photograph taken on the last day. If you need that one too, here is a full walkthrough of the balance sheet, with a Malaysian example.
07. What you need to prepare
Before you start, put these five things on the table. Most of the trouble people have with a P&L is really just one of them missing:
| What to gather | Where it usually is |
|---|---|
| Everything you sold this month | Invoice book, POS report, or your sales record |
| What you paid suppliers for stock | Purchase invoices and supplier receipts |
| The value of the stock on your shelves, first day and last day | A physical count. Last month’s closing figure is this month’s opening one |
| Every running cost you paid | Bank statement, plus any cash payments that never went through it |
| Loan interest, if you have a business loan | Your bank or financing statement |
08. How to make a simple P&L, step by step
With those in front of you, for one month:
- Pick the month and stick to it. Every figure that follows must belong to that same window.
- Add up your sales. By the date of the sale, not the date you were paid. Split into two or three groups if that tells you something useful.
- Take off returns and after-sale discounts. What is left is what you really sold — the form calls it net revenue.
- Work out what the goods cost you. Opening stock + purchases − closing stock. That is your cost of goods sold — only the goods that actually left the shop, not everything you bought.
- Subtract that from your sales. What is left is your gross profit. Work out the percentage too.
- List every running cost. Go through the bank statement line by line so nothing is missed — small cash spending is easiest to track through a petty cash float. Leave out anything the owner took for personal use.
- Subtract those, then any loan interest. What remains is your net profit before tax — what the business actually made.
- Write both percentages next to the figures, so next month has something to compare against.
This month’s closing stock is next month’s opening stock. Write it somewhere you will find it, or you will be re-counting the shop from memory in four weeks.
09. Where doing it by hand breaks down
The method above works. What it does not survive is doing it twelve times a year — and the reason is always the same one thing. At the end of every month you are rebuilding the statement from scratch, out of records kept somewhere else: a sales book here, a pile of supplier invoices there, a bank statement, and a stock count you have to do by hand.
Rebuild it from scratch every month and three things follow on their own:
- The stock count gets estimated instead of counted — and the moment that figure is a guess, every profit line underneath it is a guess too.
- The figures are not ready until the third week of the next month, so you are reacting to something six weeks old.
- A cash payment or two goes missing, which quietly makes the business look better than it really did.
10. Getting your P&L automatically
The answer to that is not a better spreadsheet. It is not rebuilding the statement at all. If the sale, the stock movement and the expense are each recorded once, at the moment they happen, then the profit and loss statement is simply a report you open — the closing stock figure is already there, and so is last month’s to compare against. Month end becomes something you read, not something you do. That is what Niagawan is for.
Cloud accounting, 3 user IDs.
- Sales and expense analytics
- Financial reports
- Receivables and payables aging
- Digital invoicing
- Bank reconciliation
- Automatic tax and zakat reports
POS and accounting together, 4 user IDs.
- Everything in the accounting side
- Barcode scanning and shift tracking
- Sales by staff, table management
- Offline mode
- Full accounting integration with SST support
Prices exclude SST. POS Lite (RM197/year) is the entry option and includes a monthly and yearly profit and loss view alongside daily sales tracking.
11. The monthly check: five numbers
Once the statement exists — and assuming the books behind it actually tally — reading it takes about two minutes. Print this or keep it beside the report:
- Net revenue — up or down on last month, and on the same month last year?
- Gross margin % — has it moved more than a point or two? If yes, something changed in buying or pricing.
- Total operating expenses — roughly flat is normal. A jump needs a name.
- Net margin % — the health of the whole business in one figure.
- The largest single expense — is it still the one you expect it to be?
The reason to record the two margins every month is that a slide shows up there long before it shows up in the bank balance. A gross margin that has drifted down three months running is a buying or pricing problem that has not yet become a cash problem — which is exactly when it is cheapest to fix. The Excel template’s second sheet lays all twelve months side by side for this.
12. Mistakes that make a P&L wrong
| Mistake | What it does | Fix |
|---|---|---|
| Using money received instead of sales made | Mixes two different months together and hides slow-paying customers entirely | Record sales by the date of the sale |
| Treating all purchases as cost of goods sold | A big restock month looks like a loss; a quiet one looks unusually good | Use opening stock + purchases − closing stock |
| Guessing closing stock | Corrupts gross profit and every margin below it | Count it, on the last day — see opening stock |
| Putting owner’s drawings in expenses | Understates real profit — a problem when a bank reads the statement | Drawings are not an expense; leave them off |
| Buying equipment and expensing all of it | One month absorbs a cost that belongs across several years | Equipment is an asset; ask your accountant how to spread it |
| Changing the expense categories each month | Nothing can be compared to anything | Fix your categories once and keep them |
| Adding an SST line when it does not apply | Misstates revenue and confuses anyone reading it | Only show SST if it applies to your business — check your status with RMCD rather than assuming |
The bottom line here is deliberately net profit before tax. How business tax is finally computed is a separate exercise with its own rules, and it is worth having an accountant or tax agent do it. This statement is the starting point for that conversation, not a substitute for it.
13. Frequently asked questions
What is a profit and loss statement?
A profit and loss statement summarises what a business earned and what it spent over one period — usually a month, quarter or year — ending in a single figure showing whether it made a profit or a loss. It is also called an income statement.
Is a profit and loss statement the same as an income statement?
Yes. They are two names for the same document. Accountants and formal accounts tend to say “income statement”; business owners and banks usually say “P&L”. Section 06 sets out the naming alongside the balance sheet, which is genuinely a different document.
How is P&L calculated?
In three steps. Cost of goods sold is opening stock plus purchases minus closing stock. Gross profit is net revenue minus cost of goods sold. Net profit is gross profit minus operating expenses minus interest. Section 05 works all three through in RM.
How do I make a simple profit and loss statement?
Pick one month, total your sales by the date of sale, take off returns, count your closing stock, work out cost of goods sold, subtract it for gross profit, list every running cost from your bank statement, then subtract those and any loan interest. Section 08 is the full step-by-step.
Can I get a free profit and loss statement template?
Yes — the Excel, Word and PDF templates on this page are free with no sign-up, along with a completed example. The Excel version calculates every subtotal and both margins for you and includes a twelve-month summary sheet.
What is in a profit and loss statement?
Revenue, less returns and discounts, giving net revenue. Then cost of goods sold, giving gross profit. Then operating expenses such as rent, salaries and utilities, giving operating profit. Then interest on borrowings, giving net profit before tax.
What is the difference between a profit and loss statement and a balance sheet?
A P&L covers a period of time and shows whether you made money over it. A balance sheet covers a single date and shows what you own and what you owe at that moment. A P&L is a video; a balance sheet is a photograph.
How can I get a profit and loss statement?
Either build it yourself from your records using the template on this page, or use accounting software that produces it from the sales and expenses you have already recorded. Niagawan Plus includes financial reports, and POS Lite includes a monthly and yearly P&L view.
What is a good gross margin?
It depends entirely on the trade — a grocer and a service business are not comparable. The useful test is your own history: compare this month to your last few months. A margin sliding two or three months running is worth investigating whatever the absolute number is.
Does the profit and loss statement include SST?
Only if SST applies to your business and to those sales. Many smaller businesses are not SST-registered, in which case there is no SST line at all. Check your own status with RMCD rather than assuming.
Should owner’s drawings go in the profit and loss statement?
No. Money the owner takes out for personal use is drawings, not a business expense, and it does not belong on the P&L. Including it understates your real profit, which matters when a bank or an investor reads the statement.
What is a profit and loss statement in Malay?
It is a penyata untung rugi. A balance sheet is a kunci kira-kira, and an income statement is a penyata pendapatan.
How often should I do a profit and loss statement?
Monthly is the useful rhythm for a small business. Quarterly and yearly statements are needed for formal purposes, but a monthly one is what lets you notice a margin sliding while it is still cheap to fix.
Why is my profit and loss statement wrong?
The most common causes are guessing closing stock instead of counting it, treating all purchases as cost of goods sold, recording sales by the date you were paid rather than the date of sale, and including owner’s drawings as an expense. Section 12 lists the full set with fixes.