The balance sheet and income statement are both important documents to business owners everywhere. When a company has a strong income statement, it will usually have a good balance sheet, but one of them can be weak while the other is strong. The balance sheet shows what a company owns (assets) and owes (liabilities) at a specific moment in time, while the income statement shows total revenues and expenses for a period of time. The balance sheet doesn’t show performance — that’s what the income statement is for. The balance sheet reports assets, liabilities, and equity, while the income statement reports revenue and expenses.
