Difference between the income statement and expenditure statement and the cash flow statement
1. Income Statement:
- The income statement provides a summary of a company's revenues and expenses over a specific period of time, typically on a quarterly or annual basis.
- It shows the company's net profit or loss by subtracting expenses from revenues.
- The income statement helps investors and analysts assess the profitability of a company and its ability to generate revenue.
2. Expenditure Statement:
- An expenditure statement is a detailed breakdown of all the expenses incurred by a company during a specific period of time.
- It includes expenses such as salaries, rent, utilities, supplies, and other operating costs.
- The expenditure statement helps companies track and analyze their spending habits and identify areas where costs can be reduced.
3. Cash Flow Statement:
- The cash flow statement provides a summary of a company's cash inflows and outflows over a specific period of time.
- It includes operating activities (e.g. revenue and expenses), investing activities (e.g. purchases of assets), and financing activities (e.g. issuance of debt or equity).
- The cash flow statement helps investors and analysts assess a company's liquidity and ability to meet its financial obligations.