Reading and Understanding Your P&L

A Profit & Loss (P&L) statement — also called an income statement — shows your revenue, costs, and profit over a specific period. AskBiz generates a P&L in Finance → P&L that updates in real time as orders and costs are imported from your connected platforms.

The P&L has four main sections:

1. Revenue: total sales in the period (net of returns and refunds)

2. Cost of Goods Sold (COGS): the direct cost of producing or buying what you sold

3. Gross Profit = Revenue − COGS

4. Operating Expenses: the costs of running the business (staff, rent, marketing, software)

5. Net Profit (or Loss) = Gross Profit − Operating Expenses

Each section is important — but for day-to-day management, Gross Profit and Gross Margin % are the most actionable metrics.

Both matter, but for different decisions:

Gross Profit tells you whether your core business model works — are you buying and selling at a sustainable margin? If gross margin is below 20% for most eCommerce businesses, the model is structurally challenged.

Net Profit tells you whether the business is profitable after all costs — but it is heavily influenced by discretionary decisions about marketing spend, headcount, and investment. A business reinvesting aggressively for growth may show low or negative net profit while building significant long-run value.

AskBiz shows both in the P&L view. For growth-stage businesses, focus primarily on gross margin trends. For mature businesses, net profit and EBITDA become more important.

EBITDA stands for Earnings Before Interest, Tax, Depreciation, and Amortisation. It is a measure of operating profitability that strips out financing costs and non-cash accounting charges — making it easier to compare businesses of different sizes and capital structures.

For small businesses, EBITDA is often used by investors and lenders as a proxy for 'how much cash does this business generate from its operations?' before debt servicing costs.

AskBiz calculates EBITDA in Finance → P&L → EBITDA View. To see EBITDA, you need to enter your depreciation and amortisation figures in Finance → Cost Tracking → Non-Cash Items (these are typically provided by your accountant).

If your P&L shows unexpected results, work through this checklist:

Revenue looks too high:

• Check whether refunds are being deducted correctly (some platforms report gross revenue before refunds)
• Check the date range — are you including partial data for a month?
• Check whether both marketplaces and direct channels are included (double-counting if same orders appear in multiple sources)

Gross margin looks too low:

• Check whether COGS is entered for all products (products with no COGS default to 0% margin, which drags down the average)
• Check whether landed cost is correctly calculated (freight and duties not always included)

Net profit looks too low:

• Check whether all recurring costs have been entered in Finance → Cost Tracking
• Check whether one-off items (equipment purchase, annual software subscriptions) are distorting the month

Your P&L is most useful as a decision-making tool when you compare it against:

1. Last period: is the business improving month-on-month and year-on-year?

2. Budget: are you on track against your plan? (See the Budget vs Actual tracking article)

3. Industry benchmarks: is your gross margin typical for your category? AskBiz shows benchmark ranges in the P&L view — tap any metric to see where you sit vs industry average.

The most important P&L discipline is reviewing it monthly, within 5 business days of month end. Delays in financial reporting mean delayed decisions — and in fast-moving businesses, a month-old P&L is of limited operational use.