1. What is P&L Percentage?

The P&L (Profit and Loss) Percentage measures the profitability of a business by showing what percentage of revenue is profit after accounting for expenses. It's a key financial metric for assessing business performance.

2. How Does the Calculator Work?

The calculator uses the P&L Percentage formula:

Where:

• \( Revenue \) — Total income generated (in currency units)
• \( Expenses \) — Total costs incurred (in currency units)

Explanation: The formula calculates the difference between revenue and expenses (profit), then expresses it as a percentage of revenue to show relative profitability.

3. Importance of P&L Calculation

Details: P&L percentage is crucial for understanding business profitability, comparing performance across periods, making financial decisions, and attracting investors. It shows how efficiently a company converts revenue into profit.

4. Using the Calculator

Tips: Enter revenue and expenses in the same currency units. Revenue must be greater than zero for calculation. The result shows what percentage of revenue is profit.

5. Frequently Asked Questions (FAQ)

Q1: What's a good P&L percentage?
A: Varies by industry, but generally 10-20% is good, 20%+ is excellent. Negative percentage indicates a loss.

Q2: How often should P&L be calculated?
A: Typically monthly for ongoing monitoring, with quarterly and annual reviews for strategic planning.

Q3: Does this include all expenses?
A: For accurate results, include all operating expenses, cost of goods sold, and other business costs.

Q4: How does this differ from profit margin?
A: P&L percentage is essentially the same as net profit margin - both measure profit as a percentage of revenue.

Q5: Can P&L percentage be over 100%?
A: Only if expenses are negative (highly unusual). Normally caps at 100% when expenses are zero.