# Profit Loss Report > Generates monthly or quarterly profit and loss statements from transaction data with revenue breakdowns, expense categories, and margin analysis. Use this skill when a solopreneur or small business owner needs to understand if they are actually profitable, wants a formatted P&L report, or needs to review financial performance over a period. - Skill: `reaperinvest/profit-loss-report` (Agent Skill) - Install (CLI): `npx skillmds@latest add reaperinvest/profit-loss-report` - Raw SKILL.md: https://api.skillmd.com/api/skills/reaperinvest/profit-loss-report/raw - Safety review: pending - Works with: Claude Code, Claude.ai, OpenAI Codex - Category: Docs & Writing - Author: reaperinvest (https://skillmd.com/u/reaperinvest) - Updated: 2026-09-22 - Page: https://skillmd.com/skills/reaperinvest/profit-loss-report --- # Profit & Loss Report ## When to Use This Skill - User wants to know if their business is profitable - User needs a monthly or quarterly P&L statement - User has transaction data (CSV, spreadsheet, or manual entries) and wants it organized - User is preparing for tax season and needs a financial summary - User wants to compare revenue and expenses across periods ## Core Principle A P&L REPORT MUST TELL THE TRUTH — CATEGORIZE EVERY DOLLAR, HIDE NOTHING, AND SHOW THE REAL MARGIN. ## Financial Disclaimer **IMPORTANT: The financial reports generated by this skill are for informational and planning purposes only. They do not constitute accounting advice or audited financial statements. Always consult a qualified accountant or CPA for official financial reporting, tax filings, and compliance matters. Accuracy depends entirely on the data provided by the user.** ## Workflow ### Phase 1: Collect Financial Data 1. Determine the reporting period (month or quarter) 2. Gather revenue data — ask the user for one of: - CSV or spreadsheet file with transactions - Manual list of income sources and amounts - Bank/payment processor summary (Stripe, PayPal, Square) 3. Gather expense data — same formats as above 4. Confirm the business type (service, e-commerce, digital products, hybrid) to set appropriate categories ### Phase 2: Categorize Transactions 5. Sort all revenue into these standard categories: | Revenue Category | Examples | |-----------------|----------| | Product Sales | Physical goods, digital downloads | | Service Revenue | Consulting, freelance work, coaching | | Recurring Revenue | Subscriptions, memberships, retainers | | Affiliate/Commission | Referral fees, affiliate payouts | | Other Income | Interest, refunds received, misc | 6. Sort all expenses into these standard categories: | Expense Category | Examples | |-----------------|----------| | Cost of Goods Sold (COGS) | Materials, manufacturing, fulfillment, platform fees | | Marketing & Advertising | Ads, sponsorships, content creation | | Software & Tools | SaaS subscriptions, hosting, domains | | Contractor & Freelancer | Outsourced labor, VA, designers | | Office & Operations | Rent, utilities, supplies, internet | | Professional Services | Legal, accounting, bookkeeping | | Travel & Meals | Business travel, client meals | | Insurance | Business liability, E&O, health (if business expense) | | Education & Training | Courses, conferences, books | | Miscellaneous | Anything that doesn't fit above | 7. **GATE: If any transaction is ambiguous, ask the user to clarify before proceeding. Do not guess categories for amounts over $500.** ### Phase 3: Generate the P&L Report 8. Build the report using this format: ``` PROFIT & LOSS STATEMENT [Business Name] Period: [Start Date] — [End Date] ═══════════════════════════════════════════════════ REVENUE ─────────────────────────────────────────────────── Product Sales $XX,XXX.XX Service Revenue $XX,XXX.XX Recurring Revenue $XX,XXX.XX Affiliate/Commission $XX,XXX.XX Other Income $XX,XXX.XX ─────────────────────────────────────────────────── TOTAL REVENUE $XX,XXX.XX ═══════════════════════════════════════════════════ COST OF GOODS SOLD (COGS) ─────────────────────────────────────────────────── [Itemized COGS] $XX,XXX.XX ─────────────────────────────────────────────────── TOTAL COGS $XX,XXX.XX ═══════════════════════════════════════════════════ GROSS PROFIT $XX,XXX.XX GROSS MARGIN XX.X% ═══════════════════════════════════════════════════ OPERATING EXPENSES ─────────────────────────────────────────────────── Marketing & Advertising $X,XXX.XX Software & Tools $X,XXX.XX Contractor & Freelancer $X,XXX.XX Office & Operations $X,XXX.XX Professional Services $X,XXX.XX Travel & Meals $X,XXX.XX Insurance $X,XXX.XX Education & Training $X,XXX.XX Miscellaneous $X,XXX.XX ─────────────────────────────────────────────────── TOTAL OPERATING EXPENSES $XX,XXX.XX ═══════════════════════════════════════════════════ NET PROFIT (LOSS) $XX,XXX.XX NET MARGIN XX.X% ═══════════════════════════════════════════════════ ``` ### Phase 4: Add Analysis 9. Below the report, include: - **Top 3 expense categories** by dollar amount - **Gross margin assessment**: Above 50% is healthy for services, above 30% for physical products - **Net margin assessment**: Above 20% is strong, 10-20% is acceptable, below 10% needs attention - **Month-over-month or quarter-over-quarter trend** if prior period data is available - **One actionable recommendation** based on the numbers ### Phase 5: Deliver 10. Output the formatted P&L report 11. Output the analysis summary 12. Save to a file if the user requests it ## Example 1: Freelance Designer — Monthly P&L **Input data provided by user:** "January revenue: 3 client projects at $2,500, $4,000, and $1,800. Sold 12 Canva templates at $29 each. Expenses: Adobe Creative Cloud $55, Figma $15, Webflow hosting $29, hired a VA for 20 hours at $25/hour, Facebook ads $350, co-working space $200, business insurance $89, bought a Skillshare course for $45." ``` PROFIT & LOSS STATEMENT Ava Park Design Studio Period: January 1 — January 31, 2026 ═══════════════════════════════════════════════════ REVENUE ─────────────────────────────────────────────────── Service Revenue (3 client projects) $8,300.00 Product Sales (12 Canva templates) $348.00 ─────────────────────────────────────────────────── TOTAL REVENUE $8,648.00 ═══════════════════════════════════════════════════ COST OF GOODS SOLD (COGS) ─────────────────────────────────────────────────── Canva Pro (template hosting) $13.00 ─────────────────────────────────────────────────── TOTAL COGS $13.00 ═══════════════════════════════════════════════════ GROSS PROFIT $8,635.00 GROSS MARGIN 99.8% ═══════════════════════════════════════════════════ OPERATING EXPENSES ─────────────────────────────────────────────────── Marketing & Advertising $350.00 Software & Tools $99.00 - Adobe Creative Cloud $55.00 - Figma $15.00 - Webflow $29.00 Contractor & Freelancer $500.00 - Virtual Assistant (20hrs x $25) Office & Operations $200.00 - Co-working space Insurance $89.00 Education & Training $45.00 - Skillshare course ─────────────────────────────────────────────────── TOTAL OPERATING EXPENSES $1,283.00 ═══════════════════════════════════════════════════ NET PROFIT $7,352.00 NET MARGIN 85.0% ═══════════════════════════════════════════════════ ``` **Analysis:** - **Top 3 expenses:** Contractor ($500), Marketing ($350), Office ($200) - **Gross margin: 99.8%** — Exceptional. Typical for service businesses with minimal COGS. - **Net margin: 85.0%** — Very strong. Well above the 20% benchmark for healthy businesses. - **Recommendation:** Marketing spend ($350) generated $8,648 in revenue. If those Facebook ads are driving client inquiries, consider increasing ad budget to $500-$700 to test whether revenue scales proportionally. ## Example 2: E-Commerce Candle Business — Quarterly P&L **Input data:** Q4 2025 — sold 847 candles at $32 average price, 45 gift sets at $78 each. COGS per candle $9, per gift set $28. Expenses: Shopify $79/mo, shipping supplies $1,240, Instagram ads $2,100, hired a photographer $800, packaging designer $450, PO Box $45/mo, product liability insurance $125/quarter, attended a craft fair (booth fee $350 + travel $280). ``` PROFIT & LOSS STATEMENT Ember & Sage Candle Co. Period: October 1 — December 31, 2025 (Q4) ═══════════════════════════════════════════════════ REVENUE ─────────────────────────────────────────────────── Product Sales (847 candles) $27,104.00 Product Sales (45 gift sets) $3,510.00 ─────────────────────────────────────────────────── TOTAL REVENUE $30,614.00 ═══════════════════════════════════════════════════ COST OF GOODS SOLD (COGS) ─────────────────────────────────────────────────── Candle materials (847 x $9) $7,623.00 Gift set materials (45 x $28) $1,260.00 Shipping supplies $1,240.00 ─────────────────────────────────────────────────── TOTAL COGS $10,123.00 ═══════════════════════════════════════════════════ GROSS PROFIT $20,491.00 GROSS MARGIN 66.9% ═══════════════════════════════════════════════════ OPERATING EXPENSES ─────────────────────────────────────────────────── Marketing & Advertising $2,100.00 - Instagram ads Software & Tools $237.00 - Shopify ($79 x 3 months) Contractor & Freelancer $1,250.00 - Photographer $800.00 - Packaging designer $450.00 Office & Operations $135.00 - PO Box ($45 x 3 months) Insurance $125.00 - Product liability (quarterly) Travel & Events $630.00 - Craft fair booth $350.00 - Travel $280.00 ─────────────────────────────────────────────────── TOTAL OPERATING EXPENSES $4,477.00 ═══════════════════════════════════════════════════ NET PROFIT $16,014.00 NET MARGIN 52.3% ═══════════════════════════════════════════════════ ``` **Analysis:** - **Top 3 expenses (excluding COGS):** Marketing ($2,100), Contractors ($1,250), Travel/Events ($630) - **Gross margin: 66.9%** — Strong for physical products (benchmark: 30%+). Gift sets have lower margin (64%) vs. candles (72%) due to higher COGS ratio. - **Net margin: 52.3%** — Excellent. Well above the 20% target. - **Q4 vs. typical quarter:** Holiday season likely inflated revenue. Track Q1 to establish a non-seasonal baseline. - **Recommendation:** Gift sets generated $3,510 on 45 units. Test increasing gift set promotion — the AOV ($78) is 2.4x a single candle ($32), and despite the lower margin percentage, profit per gift set ($50) is higher than profit per candle ($23). ## Recovery and Fallback - If the user cannot provide exact numbers, help them estimate from bank statements or payment processor dashboards (Stripe Dashboard > Payments > Export) - If categories are unclear, ask the user for the three largest expenses and their purpose — this usually reveals the right categorization - If the user has mixed personal and business transactions, flag this and only include clearly business-related items — recommend they open a separate business bank account - If prior period data is unavailable for comparison, note this in the report and recommend starting monthly tracking going forward ## Constraints - **Always include the financial disclaimer** — this is not a substitute for professional accounting - Do not estimate tax liability — recommend consulting a CPA for tax calculations - Do not include owner draws/salary in operating expenses unless the user explicitly requests it (this is an accounting choice) - If transactions are a mix of personal and business, ask the user to separate them — do not categorize personal expenses as business - Round all amounts to two decimal places - Use accrual basis by default (revenue when earned, expenses when incurred), but switch to cash basis if the user specifies - Do not provide investment advice based on P&L results