balance sheet and income statement difference

The balance sheet provides a snapshot of a company’s financial position at a specific point in time. It lists a company’s assets, liabilities, and shareholders' equity. The balance sheet follows the fundamental accounting equation: Assets = Liabilities + Shareholders’ Equity. It helps stakeholders understand what a company owns and owes, providing a clear view of its net worth and liquidity The income statement, also known as the profit and loss (P&L) statement, shows a company’s financial performance over a specific period (e.g., quarterly or annually). It details the company’s revenues, expenses, and profits or losses. The income statement helps measure a company’s profitability and provides insights into how well the company generates profit through its operations