The income statement shows how profitable or unprofitable your business is. It typically contains revenue, COGS, SG&A, which gets you down to EBITDA, and then contains depreciation and amortization, interest, and tax, which gets you down to net income.
The cash flow statement shows the cash coming in and out, how much cash gained or lost in total, which gets you to your current cash position. We start with net income, and then adding back all the non-cash items in the income statement as well as net working capital. Afterwards, any other cash flow numbers not included in the income statement are also added in.
Below are the three sections of the cash flow statement; this is not necessary for your verbal answer, but they’re displayed here for clarity.
Cash flow from operations: start with net income, deduct increases in net working capital, add back non-cash items in income statement such as D&A
Cash flow from investing: includes asset-related cash flows such as capex, proceeds from sale, acquisitions
Cash flow from financing: includes cash flows raised from debt or equity, plus debt repayments or dividends
Finally, the balance sheet displays the assets (e.g. cash, accounts receivable, property plant and equipment) on one side, and liabilities (e.g. accounts payable, debt) and shareholder’s equity on the other side. Since the assets must be either funded by liabilities or equity, assets = liabilities + shareholder’s equity.