<\/span><\/h2>\nBefore diving into the interlinking of the financial statements, let’s take a brief look at each one individually:<\/p>\n
1. Income Statement:<\/strong> Also known as the profit and loss statement, the income statement presents a company’s revenues, expenses, gains, and losses over a specific period. It showcases whether the company has made a profit or incurred a loss during that time.<\/p>\n2. Balance Sheet:<\/strong> The balance sheet provides a snapshot of a company’s financial position at a given point in time. It includes the company’s assets, liabilities, and shareholders’ equity. The balance sheet demonstrates what the company owns and owes.<\/p>\n3. Cash Flow Statement:<\/strong> This statement outlines the inflow and outflow of cash in a company during a specific period. It categorizes cash flows into operating activities, investing activities, and financing activities. The cash flow statement identifies whether a company has the ability to generate cash and meet its financial obligations.<\/p>\n