P&L Overview
This article explains how the Profit and Loss (P&L) statement works in Model Reef.
You will learn:
How the P&L is generated from variables and timing rules.
The structure of the P&L in Model Reef.
How the P&L connects to the Balance Sheet, Cashflow Statement and Cash Waterfall.
The P&L is an accrual only view of performance. Cash timing is handled separately by the timing engine.
1. How the P&L is generated
The P&L is not built with user formulas. It is generated automatically by the engine based on:
Variable types (Revenue, COGS, Opex, Staff, Tax, Assets, Liabilities).
Categories and subcategories assigned to variables.
Accrual logic from the timing engine.
For each period, Model Reef follows these steps:
This means the P&L always reconciles correctly with the Balance Sheet and Cashflow Statement.
2. Standard P&L layout
The default P&L layout in Model Reef follows this sequence:
You can customise the display via categories and custom reports, but this is the core logic.
3. Branch and consolidation behaviour
The P&L can be viewed at different structural levels:
Branch level
Shows only variables in that branch and its children.
Useful for store, division, entity or project level performance.
Parent branch and consolidated views
Show the sum of all enabled child branches.
Useful for group or total company performance.
Disabling a branch removes its contribution from consolidated P&L but does not delete its data.
4. P&L vs Cashflow and Cash Waterfall
The P&L shows when performance is recognised. It does not show when cash moves.
Links to other statements:
Balance Sheet
Timing differences between P&L and cash appear as Accounts Receivable, Accounts Payable, Tax Payable and Interest Payable.
Cashflow Statement
Cash movements are shown when they occur, not when accruals occur.
Operating cashflows, investing cashflows and financing cashflows derive from variable timing and type.
Cash Waterfall
Uses P&L lines down to EBITDA.
Then applies working capital, capex, debt, equity and dividends as cash items.
Understanding the P&L structure makes it easier to interpret the waterfall and valuation outputs.
5. Period views and common size
You can view the P&L in different ways:
Periodicity: monthly, quarterly, annual or custom ranges.
Common size: each line as a percentage of revenue.
Scenario: different models representing Base, Downside, Upside, etc.
Branch filters: specific entities or divisions.
These views do not change the underlying calculations. They just change how the same data is aggregated and displayed.
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