A snapshot is different from a flow
Four financial statements answer different business questions
REPORTING PERIOD
Start
End
Balance sheet
Position at a date: assets, liabilities and equity.
Income statement
Performance over the period: revenue, costs and profit.
Cash flow statement
Cash moving over the period: operating, investing, financing.
Equity statement
Changes over the period: the owners’ stake.
A profit figure and a cash balance answer different questions. Read the statements together when assessing a decision.
Conceptual illustration • not measured data