Making a Statement: Income and Cash Flow
In This Chapter
• Using the income statement to understand a company
• A tour through the income statement accounts
• How cash flow shows where the money comes from—and goes
In Chapter 11, you took a detailed tour of one of the key financial statements, the balance sheet. Now let’s turn to the other two major financial statements: the income statement and the cash flow statement.
The income statement is as important to your understanding of a company as the balance sheet. The cash flow statement is secondary. What it shows—the sources and uses of the cash that flowed through a company during a period—is important, but it is constructed from the balance sheet and income statement accounts. I ...