Accounting and the three statements
Part of the Investment Banking learning and recruiting path. Read the explanation and example, attempt the task, then open the self-check.
Know what to learn for your role.
From foundations to a work sample, with sources, tasks and self-checks.
Understand
The income statement reports activity over a period; the balance sheet reports a position at a point in time; cash flow explains changes in cash. Revenue and collection can occur at different times. Start with assets = liabilities + equity.
Worked example
Simplified example: a credit sale of 100 with no costs or tax adds 100 to profit and receivables, but no cash. Indirect operating cash flow is 100 minus the 100 receivable increase: zero.
Examples and numbers are educational, not employer questions, live market data or hiring criteria.
Practise and keep your output
Map the statements at sale and collection, then explain why profit differs from cash.
Keep inputs and sources, assumptions, steps, results and uncertainties in your own document. Attempt independently before checking below.
After attempting: answer and self-check
On collection, cash rises 100 and receivables fall 100; no new revenue. Operating cash flow rises 100. Check balance-sheet equality at both points.
Official channels and further reading
Pathline authors these starter lessons. These supplementary field links do not imply provider review or endorsement. Confirm Hong Kong availability and eligibility separately.
- JPMorganChase · Investment Banking Analyst Internship ↗
Read responsibilities and training; separately check Hong Kong and the current intake.
- Khan Academy · Accounting and financial statements ↗
Supplementary accounting and financial-statement lessons.