The business firm's balance sheet shows how much money the firm is worth or its net worth. The balance sheet is stated in terms of book value.
The income statement (statement of profit and loss)shows how profitable the firm is. A positive net income means the firm is making money. A negative net income means the firm is losing money.
The balance sheet is an indicator of net worth while the income statement or statement of profit and loss is an indicator of profitability.
