The income statement acts as a company's report card for a specific period, such as a quarter or a year.

It
starts with the total revenue and then deducts various expenses, resulting in the net income. This
statement reveals whether a company is making a profit or incurring losses, functioning like a personal
budget that tracks income and expenses to determine savings.

The balance sheet serves as a snapshot of a company's financial health at a specific moment, usually the
end of a fiscal year. It consists of assets, representing what the company owns (e.g., cash, property,
inventory), and liabilities, representing what it owes (e.g., loans, accounts payable). The difference
between assets and liabilities is the shareholders' equity, indicating the company's net worth. This
document is similar to checking your savings account and debts to understand your financial standing.

The cash flow statement tracks cash movement in three categories: operating activities (daily cash
flows), investing activities (asset-related cash flows), and financing activities (cash from loans or
investments). It functions like maintaining a personal budget to monitor income, spending, and savings.