Home › PDF Tools › Profit and Loss Statement Generator
Profit and Loss Statement Generator
Create a clean profit and loss statement (income statement) in a couple of minutes. Enter your revenue, cost of goods sold and operating expenses. The statement calculates gross profit, operating income, taxes and net income with margins, and you can download it as a PDF or CSV.
Last updated:
Enter amounts as positive numbers. In Other income (expense), use a minus sign for expenses such as interest paid. EBITDA adds back any operating line whose name contains “depreciation” or “amortization”.
Net income–
Gross margin–
Operating margin–
Net margin–
Everything stays in your browser and is saved on this device only.
Advertisement
Advertisement
How to use the Profit and Loss Statement Generator
Enter the business name and period, for example “For the year ended December 31, 2025” or “For the quarter ended March 31, 2026”.
Add your revenue lines. Enter returns and discounts as a negative number so they reduce revenue.
Add cost of goods sold and operating expenses as positive numbers. Use + Add line for anything missing and × to delete lines you don't need.
Set the income tax rate (use 0 for sole proprietors and pass-through businesses that don't pay entity-level tax) and add other income or expense such as interest.
Tick Compare with a prior period if you want a second column with change %.
Download the PDF or CSV, print it, or copy it as text.
The structure of a profit and loss statement
This generator uses the standard multi-step format. Each subtotal answers a different question about the business:
Line
Formula
Example (default data)
% of revenue
Total revenue
Sales + services − returns & discounts
$494,700
100.0%
Cost of goods sold
Materials + direct labor + freight
$233,200
47.1%
Gross profit
Revenue − COGS
$261,500
52.9%
Operating expenses
Rent, wages, marketing, depreciation…
$180,000
36.4%
Operating income (EBIT)
Gross profit − operating expenses
$81,500
16.5%
Other income (expense)
Interest income − interest expense
($3,600)
−0.7%
Income before taxes
EBIT + other items
$77,900
15.7%
Income tax (21%)
Income before taxes × rate
$16,359
3.3%
Net income
Income before taxes − tax
$61,541
12.4%
EBITDA (earnings before interest, taxes, depreciation and amortization) adds depreciation and amortization back to operating income: $81,500 + $8,000 = $89,500 in the example. The 21% default is the US federal corporate rate. Change it to fit your business.
Tips for a clearer P&L
Keep owner pay consistent. In a sole proprietorship, owner draws are not an expense. In a corporation, salaries paid to owners are an expense. Mixing the two distorts your margins.
Separate COGS from overhead. Gross margin is the clearest measure of pricing power, so only costs that rise and fall with sales should sit above the gross profit line.
Group small expenses. Ten to fifteen operating expense lines are usually enough. Combine tiny items under “Office & other”.
Compare periods. Turn on the prior-period column to see which costs grew faster than revenue, which is often more useful than the totals.
Use the same period length. Compare a quarter with a quarter and a year with a year. Seasonal businesses should compare with the same quarter last year.
Frequently asked questions
What is a profit and loss statement?
A profit and loss (P&L) statement, also called an income statement, summarizes a business's revenue, costs and expenses over a period such as a month, quarter or year. It ends with net income, the profit or loss left after all costs and taxes.
How is net income calculated on a P&L?
Revenue − cost of goods sold = gross profit. Gross profit − operating expenses = operating income (EBIT). Operating income + other income − other expenses = income before taxes. Income before taxes − income tax = net income.
How do I calculate gross, operating and net margin?
Divide each profit figure by total revenue. Gross margin = gross profit ÷ revenue, operating margin = operating income ÷ revenue and net margin = net income ÷ revenue. For example, $261,500 of gross profit on $494,700 of revenue is a 52.9% gross margin.
What goes in cost of goods sold versus operating expenses?
Cost of goods sold covers the direct costs of what you sell: materials, inventory purchases, direct labor and freight to bring goods in. Operating expenses are the costs of running the business that don't scale directly with each sale, such as rent, office salaries, marketing, software, insurance and depreciation. Service businesses often have little or no COGS.
How is the income tax line calculated?
The tool multiplies income before taxes by the rate you enter, and only when income before taxes is positive. It is an estimate. Real tax depends on your entity type, deductions, credits and state or local taxes. Sole proprietors, partnerships and S corporations usually set the rate to 0, because the profit is taxed on the owners' personal returns.
Is this P&L good enough for a bank or a loan application?
It produces a properly formatted, internally consistent statement that many people use for loan applications, rental applications or self-employment income proof. Lenders may also ask for tax returns, bank statements or statements prepared or reviewed by an accountant, so check what they need.
Is a P&L the same as a cash flow statement?
No. A P&L follows accrual-style revenue and expenses, including non-cash items like depreciation. A cash flow statement or forecast tracks the actual cash moving in and out of the bank, including loan repayments and equipment purchases that don't appear as expenses on the P&L.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.