Video Lesson
Prefer watching? This video covers the key concepts from this article.
The Three Financial Statements
Income Statement
Shows revenue, expenses, and profit over a period. Key metrics include gross margin, operating margin, and net income.
Balance Sheet
A snapshot of assets, liabilities, and equity at a point in time. Use it to assess financial health and leverage.
Cash Flow Statement
Tracks actual cash movements. Operating cash flow is often more reliable than net income for assessing business quality.