Let's look at how the three financial statements integrate together. We start here with the cash flow statement. The cash flow statement gives me loads of detail of cash going in and out of the business. Here we've got some cash coming in, so maybe some customers have paid their bills. And we've got cash going out, maybe we've paid some suppliers. So that gives me the net cash flow for the year and there will be many more lines in this in a real cash flow statement. It gives me lots of detail and it helps me explain the change in cash on the balance sheet. So I may have a balance sheet from a year ago with cash of 100 and I may have a balance sheet now with cash of 120.

I can see the cash has changed by 20, but if I want the detail, the cash flow statement gives that to me.

The bone sheet isn't just made up of cash in its assets. It's also made up of liabilities and in particular equity. We can find out more detail on equity via another financial statements being the income statement.

If I look at retained earnings within equity, I can see that it's maybe gone up from say 70 to 90. Cool, it's gone up by 20, but I want more detail on why that's happened and the income statement shows me that information because retained earnings shows accumulated profits not paid out as dividends. And where do we find the profit for each year? On the income statement. So here's my income statements. Let's assume that the profit was 20 and we had no dividends. That would explain why the retained earnings went up by 20 from 70 to 90. I want to delve into the detail. I want to find out why we earned a profit of 20 that's going to come from your sales minus your expenses. I could look into what made up my sales and what made up my expenses. I could even compare it to previous years and judge how well the business is doing. So the three financial statements do come together and give us a broad view of how business is performing.