The four core financial statements answer different questions about the same business.
1. Income Statement
Shows profitability over a period.
2. Cash Flow Statement
Shows where cash came from and where it went during a period.
3. Balance Sheet
Shows assets, liabilities, and equity at a point in time.
4. Statement of Shareholders’ Equity
Shows how owners’ equity changed during a period.
Best way to read them:
- use the income statement for profit
- use the cash flow statement for cash reality
- use the balance sheet for financial position
- use the equity statement for ownership changes