Final answer:
The balance sheet connects to the statement of shareholders' equity, the statement of cash flows, and the income statement, reflecting the changes in a bank's equity, cash position, and financial performance, respectively. It includes assets, liabilities, and the net worth, where the net worth is the bank's capital after subtracting liabilities from assets.
Step-by-step explanation:
The balance sheet at the end of an accounting period is a critical financial statement that connects to other financial statements, namely the statement of shareholders' equity, the statement of cash flows, and the income statement. Statement of shareholders' equity reports changes in owners' claims, or equity, during the period, affected by profits, dividends, or additional investments. The statement of cash flows details changes in the bank's cash position, cataloguing cash inflows and outflows from operating, investing, and financing activities. As for the income statement, it measures financial performance over a period and impacts the balance sheet through changes in net income, which affects assets and liabilities.
A bank's balance sheet, like any other business, includes assets, liabilities, and net worth (or bank capital). Assets include reserves held at the Federal Reserve, cash in vaults, loans to customers, and securities like U.S. treasury bonds. Liabilities are primarily customer deposits. The net worth represents the value of the bank that is owned by the shareholders, the remainder after liabilities are subtracted from assets.