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Financial statements · checked 11 November 2026
The balance sheet is a photograph of one date; the P&L and cash flow statement are films of the year. Read all three every month.
The balance sheet sets what the company owns against what it owes and what belongs to shareholders, and current assets against current liabilities says whether the next few months can be paid. The P&L takes revenue down through cost of goods sold, operating expenses, then depreciation, interest and tax to net profit, with the GST you collect kept out of revenue. A company can show a profit and still run out of cash when customers pay late.
Every question on it 5 answers
- How do I read a P&L, balance sheet, and cash flow statement? Starting Up
- How do I make a profit and loss statement for my business? Starting Up
- What financial basics does every founder need to understand? Starting Up
- How do I actually read my P&L and know if I'm making money, not just growing revenue? D2C
- What's the difference between a P&L, a cash flow statement and a balance sheet - and which one actually tells me if I'll run out of money? D2C
Tools that do it for you
The readingMost used across these answers
- Financial Intelligence for Entrepreneurs Read · 3 answers
- Income Statement Read
- Income Statement (explanation) Read
- How to Read and Analyze an Income Statement Read
- Profit and Loss Template Use
- Startup Financials: Burn Rate & Runway, Stripe / Founder Guides Read
- Understanding the Balance Sheet Statement (Part 1) Use
- Understanding the Balance Sheet Statement (Part 2) Use
- Understanding the P&L Statement (Part 1) Use
- The Cash Flow Statement (Varsity) Use
The terms
Balance SheetIncome StatementCash FlowCost of Goods SoldDepreciation
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