Financial Statements are official documents that record and summarize financial activity, including income, expenses, assets, liabilities and equity. They serve as a critical communication tool to inform stakeholders about the financial performance of a company or other organization. By providing key numbers like revenues and profits or losses, Financial Statements give an overview of the current financial health of an organization and enable deeper analysis of its finances. Understanding this information can help investors decide if their money is in the right place, business owners make informed decisions, and creditors understand their risks.