๐ Financial Statements Decoded!
Your friendly guide to understanding company finances
Balance Sheet
What a company owns and owes
๐ฐ Assets
Things the company owns: cash, buildings, equipment, inventory
๐ณ Liabilities
Things the company owes: loans, bills, debts to suppliers
๐ Equity
The difference between assets and liabilities โ the company’s true net worth!
Income Statement
The revenues and expenses story
๐ต Revenue
Money earned from selling products or services โ the top line!
๐ธ Expenses
Costs to run the business: rent, salaries, utilities, marketing
โจ Net Income
Profit after subtracting expenses from revenue โ did they make money?
Cash Flow Statement
Cash that enters and leaves the company
๐ญ Operating Activities
Cash from daily business operations โ the core money flows
๐ข Investing Activities
Cash from buying or selling long-term assets like property and equipment
๐ค Financing Activities
Cash from raising or repaying money to investors and lenders
๐ก Pro Tip for Novice Investors
Think of these three statements as puzzle pieces: The Balance Sheet is a snapshot of what the company has right now, the Income Statement shows if they’re profitable over time, and the Cash Flow Statement reveals if they have enough cash to keep the lights on. Together, they tell the complete financial story! ๐ฏ