The income statement always affects the balance sheet - Deepstash

The income statement always affects the balance sheet

A good manager is aware of how both cash and profits affect a balance sheet. A balance sheet shows if a company is financially healthy.

The balance sheet answers the following questions:

  • Do the assets outweigh the liabilities?
  • Can the company pay its bills?
  • Is the owner’s equity growing?

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A normal corporate balance sheet has two sides. On the left side are the assets (inventories, recei...

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