Course · Act II: The Three Statements · Chapter 9
How the three financial statements connect
How net income flows into retained earnings and net cash flow into the cash balance: the links between the income statement, balance sheet and cash flow statement.
Key terms
- Articulation
- The three statements tie together: net income → retained earnings, and net cash flow → change in cash.
“How the Three Connect” is part of the full course: 6 puzzles on how the three financial statements connect, with a story that carries through all five acts. Try this act’s free chapter, “The Income Statement”, first.