LESSON 4.1 · CORE

The three statements, in one lesson

What each one is for, in the order you'd actually read them.

READING A COMPANY4 MIN READ

Every set of results comes with three statements, and each answers a different question. The income statement asks whether the business made a profit over the period. The balance sheet asks what it owns and owes on one particular day. The cash flow statement asks where the cash actually went. Profit is shaped by accounting rules; cash either arrived or it didn't.

Read them in that order, then hold the cash flow statement up against the income statement: profits that keep rising while cash doesn't are telling you something. The app's figures come from its data provider. They refresh daily but are only as fresh as the company's last report, which is twice a year for most UK companies and four times for US ones. UK and European companies report under IFRS and US ones under US GAAP, so the same line can be worked out differently across markets, and providers sometimes restate past years.

Income statement · did it profit?Balance sheet · what does it own and owe?Cash flow · where did the cash go?

Three questions about one company. The last answer is the hardest to dress up.

Open a holding's Financials →

Educational content only. It is not personal financial advice.