What is meant by financial statements?

[niyati]

I keep coming across the term financial statements when reading about business and accounting. Can someone explain what financial statements are?

 

[jatin]

Financial statements are formal records of a company’s financial activities. They provide an overview of a business's financial performance and position. The main types are:

1. Income Statement – Shows profitability over a period.
2. Balance Sheet – Displays assets, liabilities, and equity at a specific point in time.
3. Cash Flow Statement – Tracks cash inflows and outflows.
4. Statement of Retained Earnings – Shows changes in retained earnings over a period.

These statements help stakeholders assess the company’s financial health and make informed decisions.

 

[jainnorton]

Financial statements are formal records of a business's financial activities, including the balance sheet, income statement, and cash flow statement. They provide insights into performance, profitability, and financial health for investors and regulators.