Understanding the financial statements

The 3 financial statements

Profit & loss / income statement

This is a summary of all revenues, costs, and expenses incurred during the year (or month, etc.)

Changes in the amounts per month are useful to know!

Balance sheet

This states the assets, liabilities and shareholders' equity at the start and end of the financial year (or month).

Changes in the amounts between the end date and start date are useful numbers!

Cash flow statement

This shows the cash inflows and outflows experienced during the year (or month, etc.)

Changes in the amounts per period are useful to know!

Profit & loss / income statement

Revenue

Balance sheet

Accounts receivables

Cash flow statement

Receipts from customers

Revenue

Accounts receivables

Receipts from customers