💡 Simplified view of a P&L
What’s included in a P&L
- Revenue: Think of revenue as money coming in the door.
- Expenses: Think of expenses as money going out the door.
- Net income/profit: The company’s profits are calculated by subtracting expenses from revenue. This is the money left over after everything else has been paid for.
![](https://www.nsuchaud.fr/wp-content/uploads/2023/01/How-Tech-Company-Make-Money-1024x575.png)
here is an example of what an income statement looks like when you open an annual (10-K) or quarterly report (10-Q). This is Microsoft’s quarter ending in September 2022. It also shows the quarter ending in September 2021 as a comparison.
![](https://www.nsuchaud.fr/wp-content/uploads/2023/01/How-Microsoft-is-Making-Money.png)
Key ratios
![](https://www.nsuchaud.fr/wp-content/uploads/2023/01/How-company-making-money-PL-margins--1024x575.png)