Key Parts of Financial Statements:

1. Income Statement:

   • This shows how much money a company makes (revenue) and how much it spends (expenses) over a certain time.
   • To find out if the company made a profit or loss, we use this formula: Profit or Loss = Revenue - Expenses.
   • For example, if a company earns $200,000 and spends$150,000, it makes a profit of $50,000.

2. Balance Sheet:

   • This gives a quick view of what a company owns (assets), what it owes (liabilities), and the owner's share (equity) at a specific time.
   • You can remember this with the equation: Assets = Liabilities + Equity.

3. Cash Flow Statement:

   • This shows how cash moves in and out of a company from its daily operations, investments, and financing.
   • It's important for understanding how well a company manages its cash and if it has enough money to pay its bills.