How to answer the link the three statements question
IB
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(Senior Monkey, 67
Points)
on 8/22/08 at 5:06am
This seems to be one of, if not the most, common interview questions. What would be the most appropriate and most simple way of answering this interview question?





I/S and B/S: Net Income on
I/S and B/S:
Net Income on I/S flows into Retained Earnings on B/S
Debt on B/S impacts Interest Expense on I/S
I/S and C/S:
NI from I/S flows into the reconciliation for C/S
C/S and B/S:
Cash on B/S is the Beg. Cash Balance on the C/S
Change in Working Capital is reflected on the C/S, particularly under Operating C/S
Ending Cash Balance flows right into the Cash item on the Balance Sheet for the next period
I don't think I missed anything, but I am in a rush, but that is the general gist.
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Thanks! That should help a
Thanks! That should help a lot. Just to be sure, can someone please confirm that that would be the best way to answer this question in an interview?