Learn How The 3 Financial Statements Link!

Understanding how the three financial statements connect is critical to gaining financial fluency.

📃 INCOME STATEMENT

Shows a company's revenue, expenses, and net income over a period of time (month, quarter, year) using accrual accounting.

📃 BALANCE SHEET

Shows a snapshot of a company's assets, liabilities, and equity at a point in time using accrual accounting.

📃 CASH FLOW STATEMENT

Shows a company's cash movements over a period of time (month, quarter, year) using cash accounting.

Many of the connections between financial statements bridge the gap between cash accounting & accrual accounting.

Note: This visual doesn't show all of the connections, just the major ones.

What questions do you have about the financial statement connections?

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