What Is a Net Worth Statement
A net worth statement, also called a balance sheet, lists what you own and what you owe at a specific date. Assets minus liabilities equal your net worth. It shows your overall financial position rather than performance over time.
What Is an Income Statement
An income statement summarizes revenues, expenses, and net income over a period, such as a month or year. It shows how much money you earned and spent, revealing whether you had a surplus or deficit during that timeframe.
Key Differences and Why They Matter
The main difference is timing: a net worth statement is a snapshot, while an income statement covers a period. Together they help you track both wealth and cash flow. For a deeper explanation, see the Investopedia guide on financial statements.
