The Three Statements
Income Statement, Balance Sheet, Cash Flow — what each measures
Every U.S. public company publishes three core financial statements every quarter (in its 10-Q) and every year (in its 10-K).
The income statement, the balance sheet, and the cash flow statement together capture the entire economic picture of a business — what it sold, what it owns, what it owes, and what cash actually flowed through it. If you can read these three documents and connect what each is telling you, you can evaluate any company on earth. Most beginners can't, which is why most beginners overpay for businesses they don't understand.
Each of the three statements answers a different question, and each is misleading on its own. The income statement answers 'how much did the company earn during this period?' The balance sheet answers 'what does the company own and owe right now?
' The cash flow statement answers 'where did the actual cash come from, and where did it go?
That is the opening. Finishing a lesson is where it stops being interesting and starts being useful: the full lesson runs to 7 sections and ends with 4 practice questions. A free account is what opens the rest, and the other 255 lessons in the Academy with it. No card.
What this lesson covers
- 1The income statement — the movie of the period
- 2The balance sheet — the photograph at quarter-end
- 3The cash flow statement — the bank account, traced
- 4How the three statements connect
- 5Apple's three statements at a glance — FY2024
- 6Where to see this on the platform
- 7Summary