Financial Statements

Financial statements are formal records that present an organization’s financial performance, cash flows, and financial position over a specific period. The three primary statements include:

• Balance Sheet: Summarizes assets, liabilities, and equity at a point in time.

• Income Statement (P&L Statement): Reports revenues, expenses, and net income over a period.

• Cash Flow Statement: Tracks the inflow and outflow of cash across operating, investing, and financing activities. These statements are essential for investors, creditors, and management to assess a company’s profitability, solvency, and liquidity.