The document outlines the hydrologic cycle as a closed system where water circulates between the atmosphere, land, and oceans, with processes like precipitation, evapotranspiration, and runoff connecting different storage types. It explains the water balance, crucial for understanding water resources in a drainage basin, through equations reflecting the conservation of mass. Examples of calculating precipitation, runoff, and evaporation rates, along with practical applications of the water balance equation for specific areas, are also provided.