Net income on income statement is important.
firstly, net income is used to calculate retained earaning, which is shown on the shareholder’s equity part on balance sheet.
secondly, net income is also the beginning point of cash flow statement, after adjusting the net cash flow from operating financing and operating activities, the cash is feed to the asset part of balance sheet.
dividends paid shown on cash flow statement are used to calculate retained earnings, which is again shown on balance sheet.
other items like depreciation expense on income statement is related to PP&E on balance sheet
and interest expense is related to long term debt on balance sheet.
impromptuz 