Walk me through 3 financial statement How are the 3 connected Enterprise value Equity Value

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Accepted Answer

The financial statements are income statement, balance sheet, and cash flow statement. They are connected through net income and retained earnings. Enterprise value is the total value of a company, including debt and equity. Equity value is the value of a company's equity only.

Income statement shows a company's revenue and expenses over a period of time
Balance sheet shows a company's assets, liabilities, and equity at a specific point in time
Cash flow statement shows a company's cash inflows and outflows over a period of time
Net income from the income statement is used to calculate retained earnings on the balance sheet
Enterprise value takes into account a company's debt and equity, while equity value only considers equity
Enterprise value = market capitalization + debt - cash
Equity value = market capitalization