Financial statements provide a snapshot of a business’s financial health. The balance sheet shows assets, liabilities, and equity, offering insight into financial stability. The income statement (or profit and loss statement) details revenues, expenses, and profits over a specific period, highlighting business performance.
The cash flow statement tracks cash inflows and outflows, crucial for managing liquidity. Together, these documents help stakeholders understand the business’s financial position, performance, and cash management, supporting informed decisions.
