Balance sheet walk
Balance sheet walk teaches balance sheet analysis using the relationship of the key financial statements, the income statement, cash flow and balance sheet.
Financial analysis using the three key financial statements
Balance Sheet Analysis Guide
We show the financial links
Most business people tend to look at each of the financial statements in turn. Our contribution is to show that all three key financial statements are linked.
The income statement shows the potential cash flows. The cash flow statement shows the real cash flows. The balance sheet shows the cash owing or payable.
Explore the links between the financial statements
The three key financial statements are:
Income statement
The income statement (or profit and loss) shows revenue, cost of sales, expenses, interest and tax, but does not show the cash flow for a business.
Balance sheet
The balance sheet shows the assets and liabilities for the business. On the balance sheet we can see the cash balance at the start and end of the period. However, the details of all the cash flows cannot be gleaned from the balance sheet.
Cash flow
The cash flow statement shows the cash flows for the business. Here we see the operating cash flows, financing cash flows and investing cash flows.
The three financial statements above are not independent of each other. See how the primary financial statements work together.
Business Valuation
Business valuation software based
on free cash flow and EVA.
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