The link between a balance sheet and an income statement is obvious, but it's also tricky. The more income your business earns, the more value should show up on its balance sheet. But the ...

Key Differences Between a Balance Sheet and an Income Statement. Balance sheets and income statements help investors make better decisions and gauge a company’s financial strength.

Not surprisingly, the income statement and balance sheet are complementary. The income statement begins with sales revenue and subtracts what it costs to make the goods sold to derive gross profit.

An integrated financial statement further shows how the income statement affects the balance sheet. In this example, the company has $10,000 in cash and $5,000 in capital stock on hand.

The balance sheet, income statement, and cash flow statement: these offer an inside look at a company. Browse Investopedia’s expert-written library to learn more.

Related Terms: Annual Reports; Balance Sheet; Cash Flow Statement; Financial Statements An income statement presents the results of a company's operations ...

An income statement shows a business's revenue, expenses, gains, and losses, starting with revenue and ending with net income. Other financial statements used by businesses are the balance sheet ...

An income statement shows income and expenses over a period of time, while a balance sheet shows assets and liabilities on a specific date, such as the beginning of a year ...

Analyzing a Balance Sheet vs. Income Statement. A balance sheet provides data to create the current ratio, debt-to-equity ratio, and return on shareholders' equity ratio.

The article Rules of Debits and Credits for the Balance Sheet and Income Statement originally appeared on Fool.com. Try any of our Foolish newsletter services free for 30 days .