Financial documents, or financial statements, are reports prepared by businesses to provide insight into their financial performance and position. They are important for making informed decisions about business operations and strategy. Financial statements typically include income statements, balance sheets, statement of retained earnings, and cash flow statements. These documents provide an assessment of a company’s ability to pay its debts and generate profits. By having an accurate understanding of a business’ financial situation, investors can evaluate the company’s long-term potential and make more informed decisions.