Basic interaction between Balance sheet income Statement n The income statement provides a calculation of net income for a period of t ime n The balance sheet shows a picture"of the company before and after that period of time n Any effects on the Balance sheet are detailed by the Income Statement. If assets go up or down we know why If liabilities go up or down, we know why ow wh ity aoiBasic Interaction Between Balance Sheet & Income Statement The Income Statement provides a calculation of net income for a period of time. The Balance Sheet shows a “picture” of the company before and after that period of time. Any effects on the Balance Sheet are detailed by the Income Statement. – If assets go up or down, we know why – If liabilities go up or down, we know why – If owner’s equity goes up or down, we know why