Financial Statements Definition
A financial statement is a record of a company’s financial activities. The three most common types of financial statements are the balance sheet, income statement, and cash flow statement.
The balance sheet shows a company’s assets, liabilities, and equity at a specific point in time. The income statement shows a company’s revenue and expenses over a period of time. The cash flow statement shows how much cash a company has coming in and going out over a period of time.
Financial statements are important because they give investors and creditors an idea of a company’s financial health. They can also be used to make informed decisions about investing in or lending to a company.
