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What items appear on all 3 financial statements?
Answer
Items that hit all three: (1) Net income — bottom of the IS, top of the CFS, flows to retained earnings on the BS; (2) Depreciation & Amortization — expense on the IS, add-back on the CFS, accumulated D&A on the BS; (3) Income tax expense — line on the IS, tax payments on the CFS, income tax payable on the BS; (4) Inventory — COGS draws from inventory (IS), change in inventory shows on the CFS, balance sits on the BS; (5) Stock-based compensation — expense on the IS, add-back on the CFS, equity on the BS.
Why interviewers ask this
Classic 'tell me about the 3 statements' follow-up. Shows you understand how the statements link. Memorize this list — it's a fast filter interviewers use.
financial statementsfundamentals