1. **Performance Evaluation:** The P&L statement provides detailed information about the revenues, costs, and expenses incurred during a specific period. This allows business owners and managers to assess the company's operational performance. By comparing these figures against previous periods or budgets, stakeholders can identify trends, measure efficiency, and evaluate the effectiveness of business strategies. For example, if the revenue increases but the net profit decreases, it might indicate rising costs or inefficiencies that need to be addressed. 2. **Decision Making:** This document aids in making informed business decisions. It shows the financial outcomes of past decisions, which can guide future business choices such as whether to expand the product line, invest in marketing, or cut expenses. For instance, if the P&L statement shows a consistent increase in sales but a disproportionate increase in marketing expenses, the management might decide to optimize or reduce marketing spend