Question: 1. A company's financial statements consist of the balance sheet, income statement, and statement of cash flows. Describe what each statement tells us.
2. How do gross profits, operating profits, and net income differ?
3. How do dividends and interest expense differ?
4. Why is it that the preferred stockholders' equity section of the balance sheet changes only when new shares are sold or repurchased, whereas the common stockholders' equity section changes from year to year regardless of whether new shares are bought or sold?