My friend took the exam and said they asked a few questions on the dif...

The balance sheet is often described as a “snapshot of the company’s financial condition,” which is a great way to define it. A balance sheet shows assets and liabilities as of the time the report is compiled. The higher the value of assets relative to the liabilities, the higher the net worth/stockholders’ equity the company has. The balance sheet does not show what happened over a reporting period. For that, we look to the income statement, which shows revenue—the top line—minus all expenses to arrive at the bottom line—net income after tax. To see if a business was profitable over a financial quarter or fiscal year, the income statement is consulted by fundamental analysts. The income statement is where profits and profit margins are expressed.