Let's say this is what we assume is how many cupcakes we sell.

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This is just the money directly from the cupcakes.

So this kind of the cash income statement,

And we'll make it more complicated in the future

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So in this period, I made 350,000.

It's the top line of the income statement.

The loss amounted to 100 dollars.

Let's see if we can use our example to understand the 3 types of income statements and hopefully understanding those income statements will also help us understand this example.

No. I want a period on this sentence.

So this right here you could view as our income statement.

How much am I making from operating the business?

The extent of the damage is inestimable.

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It is actually people that make money and lose money, not Excel spreadsheets.

How much are you worth at any one moment?

Give a better indication of what's actually going on in the buisness, and the way I did it in the first two videos, the first column over here

So hopefully this gives you a idea of why accrual gives a better picture of what's happening in a buisness.

And then in month 4 we actually earned the revenue.

So let's say it's 3 million.

And we'll focus on that a little bit later because that's a little bit more nuanced relative to the income statement.

And I'll write the common acronym in there, COGS.

We found activity in other brain regions also in a brain region associated with calculating gains and losses.

It could be a quarterly income statement.

But what you really need to be doing is working with your investors and your management team is to derive the metrics that matter.

And we could have modeled out their income statements further.

It would be minus 12,500 in each year, depreciation expense, and we would account for it on the balance sheet.

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