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Leadership Question: Balance Sheet or Income Statement

In your opinion, which is a better indicator of the financial state of an organization: the balance sheet or the income statement? Please provide a reference.

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The balance sheet and income statement give two very different views of financial health. The balance sheet is an immediate short-term view: what resources do they have now and what claims are against those resources? So, if you want a short-term or immediate view of the financial state, the balance sheet will take care of it better than the income statement view.

The income statement view shows the result of the transactions over the ...

Solution Summary

Your discussion is 243 words and two references and recommends the balance sheet under one circumstance and the income statement under another and explains why.