How to Read Your P&L Like a Pro (Even If You Normally Glaze Over at Line 3)
Learn how to read your P&L like a pro. A simple, jargon-free guide for CEOs to spot trends, understand performance, and make confident financial decisions.
Your bookkeeping is done, by your amazing bookkeeper.
Your P&L lands in your inbox.
You open it, skim the first few lines:
Sales look okay… did I make a profit this month?
Then something catches your eye.
A number that feels a bit… off.
You make a mental note to ask someone about it later — and then the phone goes.
And just like that, the P&L is closed.
Not to be opened again until next month, when the same pattern repeats.
If this is you, you’re not alone.
But it is time to break the cycle because CEOs who grow sustainably don’t just glance at their numbers. They understand them. They use them. They make decisions with them.
And the good news?
Reading your P&L like a pro is a skill, not a personality trait.
Here’s exactly how to do it, the same commentary that runs through my own mind when I review a P&L with a client.
Step 1: Start with the Calendar View (The Underrated Game-Changer)
Before diving into any single month, switch to a calendar P&L, a month-by-month view across the year.
Honestly, this is where the magic happens.
You can spot patterns instantly:
costs creeping up
seasonal sales fluctuations
a sudden dip that doesn’t make sense
something missing entirely
It turns your numbers from isolated snapshots into an actual story.
Step 2: Walk Through the P&L Line by Line (Slowly… on Purpose)
This is where CEOs often rush. Don’t.
Think of it like a conversation with your business.
As you go line by line, ask yourself:
1. What’s the trend, up or down? And does it feel right?
Yes, gut instinct matters. You know your business better than any spreadsheet.
2. Does this align with our business model and seasonality?
A quiet August is normal for some industries… and a red flag for others.
3. Are my key ratios in line?
Look at:
Gross Profit %
Staff Cost %
Operating Profit %
Ratios tell you whether you’re efficient, not just earning.
You also might have others that are tailored for your business, whatever they are look at them and ask what’s the story?
4. What stands out?
If it’s significantly higher, lower, or just “odd”… pause here.
5. Do I understand what’s driving this?
And if not, that’s your first action point.
6. Is it a one-off or something that will repeat?
This is the difference between “we overspent once” and “our costs are out of control”.
7. Does anything look like it’s missing?
You’d be surprised how often this is the real culprit.
8. And most importantly: is this format helping me actually see what’s going on?
Because if not?
Then you need a different cut of the data and that’s okay.
A standard P&L has its place (your grown-up business needs it),
but management reporting should be tailored to how you operate.
Never be afraid to say:
“Can we see this another way?”
That’s exactly what I do with clients, build reporting that reflects how their business actually works, not just what the accounting software spits out.
Step 3: Compare Against the Plan (Otherwise You’re Flying Blind)
Once you’ve understood the raw numbers, look at your performance against your budget or forecast, both monthly and year-to-date.
Ask:
Are we on target?
Where are the biggest variances?
Why have they happened?
Do we need to revise the forecast?
Does the team need new actions or priorities?
This is the moment where CEOs shift from reactive to strategic. You’re no longer judging the numbers, you’re using them.
Step 4: Repeat Monthly (Yes, Monthly, Not ‘When I Get to It’)
Reading your P&L properly every month creates something powerful:
proximity.
You start to feel when something’s off.
You become more confident in your decisions.
You spot opportunities sooner.
You stop firefighting.
You step fully into the CEO role you’ve been growing into.
Final Thought
You don’t need to be “good with numbers” to understand your P&L.
You just need someone to help you read the story it’s telling and over time, it becomes second nature.
If you want to go deeper or you’ve been staring at your P&L thinking,
“Does this even make sense?”
That’s exactly the kind of work I do with clients every day.
