---
title: Did I make money?
summary: How to read your Profit & Loss in 30 seconds, what each line means, and the two traps that make the number lie.
order: 2
---

# Did I make money?

## The 30-second answer

Open **Reports → Profit & Loss**, set the date range to the
period you care about (this month / this quarter / this
year), and look at **Net Income** at the bottom.

- Positive? Yes, you made money.
- Negative? You spent more than you earned.

If that's all you needed, you're done. The rest of this
page explains what's behind that single number — useful
when it surprises you.

## What the line items mean

| Line | Plain English |
| --- | --- |
| **Revenue** | Money your customers paid you (or owe you, on accrual). |
| **Cost of Goods Sold (COGS)** | What it cost you to deliver the thing you sold. |
| **Gross Profit** | Revenue minus COGS. The margin on what you sold. |
| **Operating Expenses** | Everything else it takes to run the business — rent, software, salaries. |
| **Operating Income** | Gross Profit minus Operating Expenses. |
| **Net Income** | After interest + taxes + everything. The actual profit. |

A worked example: you sell consulting for $10,000 in
January. You pay a subcontractor $4,000 for part of it,
$1,200 in software, and $300 in coffee meetings. Revenue
$10,000, COGS $4,000, Gross Profit $6,000, Operating
Expenses $1,500, Net Income $4,500. You made money.

## The two big traps

### Trap 1: "I have money in the bank" ≠ "I made money"

The bank balance is **cash**. Net Income on accrual basis
includes invoices you've sent that haven't been paid yet,
and excludes deposits that aren't actually revenue (loans,
owner contributions). If your P&L says you made money and
your bank account is shrinking, the gap is usually
unpaid invoices or money you took out of the business —
not a bookkeeping error.

### Trap 2: One month is not a trend

Profitable in March, unprofitable in April? That's
business — it doesn't mean anything went wrong. **Look
at the trend over 3-6 months** before reading anything
into a single month.

## When the number is wrong

If Net Income looks too good to be true or too bad:

- **Suspiciously high** — common cause: expenses sitting
  in the wrong account (e.g., owner draws miscategorized
  as a revenue offset).
- **Suspiciously low** — common cause: a big deposit got
  booked as Revenue when it was actually a loan or
  refund.
- **Negative when you know you're profitable** — usually
  uncategorized transactions. Run [the month-end
  checklist](/docs/accounting/for-business-owners/month-end-checklist).

For the column definitions and the SQL behind each line,
see [Yoke Ledger Reports](/docs/yoke-ledger/reports).