Net income after tax doesn't appear on the balance sheet, but the net income (or loss) you earn eventually shows up on the balance sheet as an increase or decrease in assets.

Suppose you're preparing the balance sheet for the third quarter. Take the second quarter retained earnings, add the company's net income for the third quarter, subtract dividends and you're there.

Use this simple equation for calculating dividends and learn to determine a dividend using only a balance sheet. Learn to read an accounting statement.

An income statement shows the ability of a company to generate profit while a balance statement shows a business’s assets and liabilities. Discover the importance and how to read them.