Firms issue financial statements to provide transparency around their income, assets, liabilities, and financial position. Similarly, individuals applying for loans are asked to disclose similar financial information to prove their ability to repay debt. The document discusses a case study comparing two individuals, Jucheng and Dave, applying for home loans. Jucheng recently started a new stable job and has irregular supplemental income, while Dave has a long history of stable employment. From the perspective of the lender, Jucheng is a more problematic applicant because he has more difficulty documenting his income, assets, and liabilities. By understanding key concepts from corporate financial statements, the loan officer can help explain to Jucheng why such documentation is important to prove