Profit and loss statement

A profit and loss statement, or P&L, lists everything a practice collected and everything it spent over a period, ending in a net income figure at the bottom. It is the single document that turns a feeling (busy, stressed, fine) into a number, which is why Ryan treats reading your own P&L, monthly, as non-negotiable for an owner rather than something to leave entirely to the accountant.

Reading one well means going past the bottom line to the categories above it: is overhead as a percentage of collections inside a healthy range, is any one line (lab, supplies, payroll) creeping up faster than collections are growing, does doctor compensation reflect what is actually being paid out. A P&L read only once a year at tax time catches problems a year late; read monthly, it catches a drifting number while it is still a small, cheap fix.

For a practice being bought or sold, the P&L is also the starting document for the whole valuation conversation (it is where add-backs get identified and adjusted EBITDA gets built), so a buyer's first request in due diligence is almost always three years of P&Ls, not the tax return alone.