Using Financial Statements to Measure Financial Health


THE THREE FINANCIAL statements offer three different perspectives on your company’s financial performance. That is, they tell three different but related stories about how well your company is doing financially.

  • The income statement shows the bottom line: it indicates how much profit or loss a company generates over a period of time—a month, a quarter, or a year.
  • The balance sheet shows a company’s financial position at a specific point in time. That is, it gives a snapshot of the company’s financial situation—its assets, liabilities, and equity—on a given day.
  • The cash flow statement tells ...

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