Profit and Loss Statement (P&L): How to Read One and What Every Line Means
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Key terms
- Capital LossA loss incurred when selling an asset for less than its purchase price. Capital losses can offset capital gains to reduce tax liability.
- HELOC (Home Equity Line of Credit)A revolving credit line secured by your home equity. You can borrow, repay, and borrow again up to your credit limit, typically with variable interest rates.
- Stop-Loss OrderAn order to sell a stock when it reaches a specific price, limiting potential losses. Becomes a market order when triggered, so execution price isn't guaranteed.
- Statement BalanceThe total amount owed on a credit card at the end of the billing cycle. Paying this amount in full by the due date avoids interest charges and maximizes the grace period.
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