HBR 20-Minute Manager Boxed Set (10 Books) (HBR 20-Minute Manager Series)

31

Using the Statements to

Measure Financial Health

T

he fi nancial statements tell different but re-

lated stories about how well your company is

doing fi nancially:

• The income statement shows the bottom line.

Using the rules of accounting, it indicates how

much profi t or loss a company generated over a

period of time—a month, a quarter, or a year.

• The balance sheet shows whether a company is

solvent. It provides a snapshot of the company’s

assets, liabilities, and equity on a given day.

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Finance Basics

32

• The cash fl ow statement shows how much cash

a company is generating. It also tracks, ...