How to Use This Resource: This quick reference summarizes the three core financial statements you will study in Units 4 through 6. Keep it open during the Financial Statements Scavenger Hunt quiz as a reference guide.
The Income Statement
Covers a time period (e.g., "Year ended December 31, 2025")
Shows how much a company made or lost. Flows from top to bottom:
Key ratio:
Tells you how many cents the company keeps per dollar of revenue. Restaurants: 5-15%. Tech: 20-30%+.
The Balance Sheet
Shows a single moment (e.g., "As of December 31, 2025")
Shows what a company owns and owes. Always balances:
Assets = what the company owns (cash, equipment, buildings)
Liabilities = what the company owes (debt, bills)
Equity = the difference (what belongs to owners)
The Statement of Cash Flows
Covers a time period, like the income statement
Tracks actual cash moving in and out, organized by why:
Operating Activities: cash from running the business (usually positive)
Investing Activities: cash spent on equipment, buildings (usually negative)
Financing Activities: cash from borrowing or selling stock
A company can be "profitable" on the income statement but running out of cash. This statement catches that. You'll study a real example of this in Unit 6.
Reading Large Numbers
Check the top of each statement for the units note. Then:
| Statement shows | Units note | Actual amount |
|---|---|---|
| 11,925,601 | "in thousands" | $11.9 billion |
| 416,161 | "in millions" | $416 billion |
| 1,153,881 | "in millions" | $1.15 trillion |
Calculating Growth
Example: Revenue went from $9.9B to $11.9B.
Growth = ($11.9B - $9.9B) ÷ $9.9B × 100% = about 20% growth.