How is the income statement linked to the balance sheet?

The bottom line of the income statement is net income.  Net income links to both the balance sheet and cash flow statement. 

In terms of the balance sheet, net income flows into stockholder’s equity via retained earnings.  Retained earnings is equal to the previous period’s retained earnings plus net income from this period less dividends from this period. 

In terms of the cash flow statement, net income is the first line as it is used to calculate cash flows from operations.  Also, any non-cash expenses or non-cash income from the income statement (i.e., depreciation and amortization) flow into the cash flow statement and adjust net income to arrive at cash flow from operations. 

Any balance sheet items that have a cash impact (i.e., working capital, financing, PP&E, etc.) are linked to the cash flow statement since it is either a source or use of cash.  The net change in cash on the cash flow statement and cash from the previous period’s balance sheet comprise cash for this period.

Income statement result whether it profit or loss comes under Shareholders / Owners Equity account in the balance sheet under period profit & loss account and then at year end date must be transferred to Retained Earnings account.

Income Statement shows wheather the company is in profit or loss. Later it is added in balance sheet to owner's equity if it is an profit orelse deducted if it is an loss.

ncome Statement is another type of a financial statement.
It summarizes activities and events of one company which happened in a period of time.
Usually, there are monthly, quarterly, and annual income statement.
An income statement will show all revenues, all expenses, and net profits in detail.
On the contrary, a balance sheet show a company financial positions such as assets and debt at that precise date.
A balance sheet will show company's assets, liabilities and sharesholders equities.
Assuming no asset or liability changes, one take the net profit figures from an income statement and add it to the shareholders equities portion.For financial statement analysis purposes, having either one is useless.
It is essential to have both income statement and balance sheet together.