FSA: follow the cash, then the accrual
Financial statement items become easy when you decide which statement is doing the talking. Income can be earned before cash arrives. Cash can move without hitting earnings this period. The balance sheet is the stock; the other two statements are the flow. CFA Drill writes original numbers so you practice that map.
A working order
Read the question for the target (profitability, liquidity, leverage, or quality). Write the identity: ROE pieces, current ratio, interest coverage, or CFO versus net income. Then plug the stem. If two choices are close, you usually missed a classification (operating versus financing) or an inventory / depreciation convention—not the calculator.
Sample (original): Rising receivables and falling CFO while net income is up is a quality flag, not proof of a better business. The drill is whether you treat earnings as cash. You should not.
Inventory and long-lived assets
Cost-flow assumptions change COGS and ending inventory in opposite directions when prices move. Depreciation methods change the path of expense, not the total cash paid for the asset. If a stem asks which method shows higher income in an inflation year, name the method first, then the direction—do not memorize a slogan without the price path.
Taxes in one sentence
Book income and taxable income can differ in timing. Deferred items are the bridge. If an item gives you enacted rate changes, apply the new rate to the temporary differences that remain—do not leave the old rate on the balance sheet out of habit.
Practice
Use attempt first, then reverse-engineer the identity. More map: study guide. App: cfa-drill.com.