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the income statement balance sheet and cash flow statement are all connected in one way or another all of the statements together show the financial position of a business the income statement shows how much profit the business made the balance sheet shows the assets liabilities and owners equity and the cash flow statement shows how much cash the business produced invested and raised investors should know how these three statements connect to each other if they want to find excellent investments on their own lets see how they connect with an example say a guy named tim starts a car company and calls it tims cars its the end of tims cars second year of operations so they already have financial statements from the first year and now the current year tims cars is a new and small company so it only sells one car in the whole year a customer buys a car from the company for one hundred thousand dollars on the income statement this one hundred thousand dollars is recorded as revenue a
