How the 3 Financial Statements Interconnect

✨MONEY MUSINGS: Financial Statements✨ There are 3 financial statements that most businesses use (or should use). 1) Income Statement aka Profit & Loss Statement 2) Balance Sheet 3) Cashflow Statement All three look at the health of your business in hindsight, so for example the last 12 months. They are very powerful and give a lot of information. External parties, like investors or banks or suppliers, use them to assess the health of your business. #moneymusings #financialstatement #numbersarefun #moneymoneymoney #FinanceTips #financialjargon

📊 Understanding the Three Financial Statements! Every successful business relies on these key reports to track performance and financial health: 💰 Balance Sheet – Shows what a company owns (assets) and owes (liabilities), plus shareholder’s equity. 📈 Income Statement – Tells you if the company made a profit or loss over a period. 💵 Cash Flow Statement – Tracks how cash moves in and out, revealing liquidity. Together, these statements provide a full picture of a company’s financial strength, profitability, and cash position. 📍 Balance = Asset = Liability + Equity 📍 EBITDA = Earning Before Interest, Tax, Depreciation & Amortization 📍 CFO + CFI + CFF = Total Cash Flow #Finance #Accounting #FinancialStatements #BalanceSheet #IncomeStatement #CashFlow #CharteredAccountants #BusinessInsights

📊 Difference Between Balance Sheet and Income Statement 🏦 Balance Sheet: Shows the company’s financial position at a specific date — what it owns (assets) and owes (liabilities), plus the owner’s equity. ➡ It’s a snapshot of the company’s financial health. 📈 Income Statement: Shows the company’s performance over a period of time — revenues, expenses, and profit or loss. ➡ It reflects how the business earned or lost money. ✅ Key Difference: Balance Sheet = what the company has and owes 📅 Income Statement = what the company earns and spends 📆 #Accounting #Finance #Business #FinancialStatements #ProfessionalGrowth

📘 Balance Sheet vs Profit & Loss Statement “One shows what you own, the other shows how you perform.” Both are key pillars of financial reporting — but they tell different stories: 💰 Balance Sheet — Snapshot of financial position Shows what your business owns (assets) and owes (liabilities) at a specific date. Reflects your net worth (equity). 🕒 Think: What do we have today? 📈 Profit & Loss Statement (P&L) — Summary of performance Shows your income, expenses, and profit over a period. Reveals how efficiently your business operates. 🗓️ Think: How did we perform this month/quarter/year? 💡 Together, they show both your financial health and your journey. #Accounting Basics #Finance Education #Financial Statements #Business Learning #Finance Knowledge

💼 Understanding Financial Statements — The Foundation of Finance Financial statements are like a report card for a company’s financial health. They help us understand how well a company is performing, where it’s earning, spending, and investing its money. Financial statement analysis goes one step further — it examines those numbers to tell us the true financial story of a business. The three key components are: 📘 Income Statement – Shows revenue and expenses, helping us see profitability. 📗 Balance Sheet – Reflects the company’s assets, liabilities, and equity — a snapshot of what the company owns and owes. 📙 Cash Flow Statement – Tracks the inflow and outflow of cash, revealing how money actually moves in the business. Together, these statements form the base for every valuation, investment, or strategic financial decision. #InvestmentBanking #thevaluationschool #Finance #corporatefinance #linkedin

📊 The heart of accounting in one simple formula: Assets = Liabilities + Equity Every balance sheet tells this story — it’s the foundation of every financial statement. 🔍 Master your finances. Build smarter strategies. #AccountingFundamentals #FinanceTips #BusinessStrategy #DynamicSolutions

Day 21/100 – Introduction to Financial Ratios Numbers alone don’t tell stories — ratios do. Financial ratios turn complex data into simple insights that help you see: 💡 how profitable, liquid, leveraged, or efficient a company really is. Whether you’re analyzing a stock or a balance sheet, ratios are the lens that bring everything into focus. #100DaysOfFinance #Finance #Investing #Learning #FinancialRatios #Accounting #FinancialEducation #FinanceForAll #linkedin #investmentbanking

📢 Do you truly understand what the Income Statement reveals? The Income Statement isn’t just a list of numbers—it’s the story of a company’s performance over time. From revenue to net profit, every line reflects a decision, a cost, or an opportunity. Whether you're an accountant, investor, or entrepreneur, mastering the Income Statement gives you sharper insight and smarter financial decision-making power. In this post, I’ll break down its key components, how to analyze them, and the most important financial metrics you can extract. Stay tuned 👇 #Finance #Accounting #IncomeStatement #FinancialAnalysis #BusinessInsights #LinkedInFinance

Day 5/100 – Understanding the Income Statement Every company’s story starts here - the Income Statement. It tracks what you earn, what you spend, and what’s left - your profit. From revenue to net income, each step reveals how efficiently a business turns effort into earnings. In short, it’s where the “top line” meets the “bottom line.” #100DaysOfFinance #Learning #Investing #FinancialEducation #FinanceForAll #Valuation #Accounting #linkedin #finance #investmentbanking

Deciphering Your Profit & Loss (P&L) Statement Your Profit & Loss (P&L) statement, also known as an Income Statement, is a vital report. It shows your business's revenues, costs, and ultimately, your net profit or loss over a period. Learning to read your P&L helps you understand your business's financial performance. What story does yours tell? #P&LStatement #IncomeStatement #FinancialAnalysis #BusinessPerformance #Profitability #TriCountyBookkeeping