{"ok":true,"canonical_url":"https://dealroom.so/glossary/profit-and-loss-statement","api_url":"https://dealroom.so/api/public/glossary/profit-and-loss-statement","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"profit-and-loss-statement","term":"Profit and Loss Statement","group":"Reading the business","definition":"A financial report summarizing a business's revenues, expenses, and net profit or loss over a specific period. Buyers care because it’s a primary tool to understand historical profitability and the business’s ability to generate cash.","what_it_means":"This is one of the most critical documents during due diligence. You'll analyze several years of P&Ls, often with add-backs, to determine the true owner earnings and project future performance. Verify the P&L against tax returns and bank statements to ensure accuracy.","url":"https://dealroom.so/glossary/profit-and-loss-statement","official_sources":[],"related":[{"slug":"balance-sheet","term":"Balance Sheet","url":"https://dealroom.so/glossary/balance-sheet"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"add-backs","term":"Add-backs","url":"https://dealroom.so/glossary/add-backs"},{"slug":"owner-earnings","term":"Owner earnings","url":"https://dealroom.so/glossary/owner-earnings"}],"related_questions":[{"question":"What is a 'personal financial statement' and why is it needed for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-a-personal-financial-statement-and-why-is-it-needed-for-an-sba-7-a-loan"},{"question":"What does a 'personal financial statement' entail and why is it needed for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/what-does-a-personal-financial-statement-entail-and-why-is-it-needed-for-an-sba-7-a-loan"},{"question":"What if my personal financial statement shows low liquidity, but I have a strong credit score and business plan?","url":"https://dealroom.so/sba-7a/questions/what-if-my-personal-financial-statement-shows-low-liquidity-but-i-have-a-strong-credit-sco"},{"question":"What happens if my personal financial statement shows low liquidity, but I have a strong credit score and business plan?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-my-personal-financial-statement-shows-low-liquidity-but-i-have-a-strong-cr"},{"question":"Can a non-profit organization with a for-profit subsidiary be eligible for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-non-profit-organization-with-a-for-profit-subsidiary-be-eligible-for-a-7-a-loan"},{"question":"What if my personal financial statement shows low liquid assets?","url":"https://dealroom.so/sba-loans/basics/what-if-my-personal-financial-statement-shows-low-liquid-assets"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Profit and Loss Statement","url":"https://dealroom.so/glossary/profit-and-loss-statement","source_type":"DealRoom Data"}}