CHAPTER 3

The financial statements

The longer I go on, the more I am aware of the power of finance.’

Justin Welby

icon Aim

The aim of this chapter is to understand the primary financial statements of a business and how they interact with each other.

icon Outcomes

By the end of this chapter you will understand:

  • the main elements of the balance sheet
  • the main elements of the income statement (also known as the profit and loss account)
  • how the balance sheet and income statement interact
  • the main elements of the cash flow statement and how it reconciles ...

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