Accounting 101 – the P&L Statement

March 15, 2010

Anyone with any amount of accounting exposure can tell you that the 3 most commonly used financial reports are:

1. Profit & Loss Statement (aka Income Statement or simply the P&L)
2. Balance Sheet (aka BS)
3. Statement of Cash Flow (aka Cashflow)

While Steve Blank suggested that metrics may be more important than these traditional financial statements for a startup company, one cannot argue the relevance and importance of the information these reports provide. Fred Wilson of A VC is doing his MBA Mondays on the basics of these three reports, what they are and how they are important. See What is the Profit and Loss (Income) Statement?