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Over 700 finance terms, Shmooped to perfection.
The infamous P&L or profit and loss statement.
This statement is supposed to show a company's revenues, expenses, and earnings. The idea is that it's supposed to be a clear-cut set of numbers that shows what's coming in and what's heading out. Is the company making money? Is it bleeding cash?
The reality is that accountants can do all kinds of fun accounting stuff to fudge the numbers and hide what's really going on, so those black-and-white numbers don't always tell the full story.
In cases like Enron, WorldCom, and other financial disasters, income statements are telling a mostly fictional story.