Accounting – Three Financial Statements
Articles
Why Does Depreciation Increase Cash Flow Even Though It Lowers Net Income?
Why does depreciation increase cash flow even though it lowers net income? The D&A tax shield explained step by step across all three statements. Jetzt üben.
How to Answer the '3-Statement Depreciation Change' Interview Question
How do you answer the '3-statement depreciation change' interview question? Master EBIT, the tax shield, and cash flow linkage step by step. Practice now.
Why Does Net Income Rise But Cash Flow Fall When Revenue Grows?
Why do Net Income and Cash Flow diverge when Revenue grows? Learn the Accounts Receivable mechanic behind this classic interview question. Practice now.
How to Answer the '3-Statement Revenue Increase' Interview Question
How do you answer the classic 'Revenue increases by $100' 3-statement interview question? Master the margin, cash flow, and balance check. Practice now.
Does Buying Inventory Affect the Income Statement? Here's What Actually Happens
Does buying inventory hit the income statement? Learn why it's a balance-sheet event, not an expense, in this classic finance interview question. Practice now.
3-Statement Interview Question: How to Answer 'Buy Inventory for Cash' Step by Step
How do you answer the 'buy $100 inventory for cash' 3-statement interview question? Master the 5-step framework top interviewers expect to hear. Practice now.
How Does Taking Out a Loan Affect the 3 Financial Statements?
How does taking out a $100 loan affect the 3 financial statements? Learn the two-stage answer: issuance day vs. ongoing interest expense. Practice now.
How to Answer the '$100 Loan' 3-Statement Interview Question
How do you answer the '$100 loan' 3-statement interview question? Master the 4-step framework, including the after-tax interest shield. Practice now.
Does Buying Equipment for Cash Affect the Income Statement? Here's What Actually Happens
Does buying equipment for cash hit the income statement? Learn why it's a balance-sheet CapEx event, not an expense, until depreciation begins. Practice now.
3-Statement Interview Question: How to Answer 'Buy Equipment for Cash' Step by Step
How do you answer the 'buy equipment for cash' 3-statement interview question? Master the 5-step framework for a confident, structured answer. Practice now.
Why Does Net Income Rise But Cash Flow Fall When Accounts Receivable Increases?
Why do Net Income and cash flow diverge when Accounts Receivable rises? Learn the accrual gap tested in this classic finance interview question. Practice now.
3-Statement Interview Question: How to Answer 'Accounts Receivable Increases by $50' Step by Step
How do you answer the 'Accounts Receivable increases by $50' 3-statement interview question? Master the 4-step framework for a confident answer. Practice now.
Why Dividends Don't Show Up on the Income Statement
Why don't dividends show up on the income statement? Learn how they hit Retained Earnings and the Cash Flow from Financing section instead. Practice now.
3-Statement Impact Questions in Interviews: A Step-by-Step Approach
How do you answer '3-statement impact' questions in finance interviews? Master the 4-question framework that works for any transaction. Practice now.
What Happens When a Company Issues Stock? The 3-Statement Impact
What happens when a company issues new stock for cash? Learn the full 3-statement impact, including exactly why dilution still happens. Practice now.
How to Answer '3-Statement Change' Interview Questions (Stock Issuance Example)
How do you answer '3-statement change' interview questions? Master the 3-step framework using a $100 stock issuance example, step by step. Practice now.
Capitalize vs. Expense: What It Means and Why It Moves EBITDA, Net Income, and Cash Flow
What's the difference between capitalizing and expensing a cost? Learn exactly why it moves EBITDA, EBIT, and cash flow so differently. Practice now.
How to Answer 'Capitalize or Expense?' in a Finance Interview (Step-by-Step)
How should you answer a capitalize-or-expense interview question? Follow this 4-step framework covering EBITDA, cash flow, and the balance sheet. Practice now.
Why Doesn't a Goodwill Impairment Increase Cash Flow? The Missing Tax Shield Explained
Why doesn't a Goodwill impairment boost cash flow like Depreciation does? Learn the missing tax shield behind this common interview trap. Practice now.
How to Answer the '3-Statement Goodwill Impairment' Interview Question
How do you answer a 3-statement Goodwill impairment interview question? Master the 4-step framework covering EBIT, tax, and cash flow impact. Practice now.
What Is Deferred Revenue? A Finance Interview Guide
What is deferred revenue and why is it recorded as a liability, not income? Learn how cash and revenue diverge under accrual accounting rules. Practice now.
How to Answer the 'Customer Pays Upfront' 3-Statement Interview Question
How do you answer the customer-pays-upfront 3-statement interview question? Master the 3-step deferred revenue framework for a confident answer. Practice now.
Cases
Connect the Three Statements
Walk me through how the three financial statements connect to each other.
3-Statement Change: Depreciation Increases by $100
Walk me through what happens across the income statement, cash flow statement, and balance sheet if Depreciation & Amortization increases by $100 for the year, with everything else held constant.
3-Statement Change: Revenue Increases by $100
Walk me through what happens across the income statement, cash flow statement, and balance sheet if Revenue increases by $100 for the year, assuming the extra revenue flows through at a 40% margin, with everything else held constant.
3-Statement Change: Buy $100 of Inventory for Cash
Walk me through what happens across the income statement, cash flow statement, and balance sheet if a company buys $100 of inventory for cash, with everything else held constant.
3-Statement Change: Take Out a $100 Loan
Walk me through what happens across the income statement, cash flow statement, and balance sheet if a company takes out a $100 loan, first at the moment the loan is issued and then over the following year as it accrues interest, with everything else held constant.
3-Statement Change: Buy Equipment for $100 Cash
As a financial analyst, you are asked to walk through how a company's three financial statements change when it purchases $100 of equipment for cash — first at the moment of purchase, and then in the following period once depreciation begins.
3-Statement Change: Accounts Receivable Increases by $50
As a financial analyst, you are asked to walk through how a company's three financial statements change when it recognizes a $50 sale on credit — with revenue booked immediately, but the cash from the customer not collected until a later period.
3-Statement Change: Pay a $50 Dividend
Walk me through what happens across the income statement, cash flow statement, and balance sheet if a company pays a $50 dividend, with everything else held constant.
3-Statement Change: Issue $100 of Stock
Walk me through what happens across the three financial statements when a company issues $100 of new stock for cash.
3-Statement Change: Capitalize vs. Expense $100
Walk me through what happens across the income statement, cash flow statement, and balance sheet if a company spends $100 and chooses to either expense it immediately or capitalize it and depreciate it over 5 years, with a 25% tax rate and everything else held constant.
3-Statement Change: Write Down Goodwill by $100
Walk me through what happens across the income statement, cash flow statement, and balance sheet if a company recognizes a $100 Goodwill impairment that is not deductible for tax purposes, with a 25% tax rate and everything else held constant.
3-Statement Change: Customer Pays Upfront (Deferred Revenue)
As a financial analyst, you are asked to walk through how a company's three financial statements change when a customer pays $100 upfront for a service that has not yet been delivered, with revenue deferred until the service is performed.