Financial statement (financial statement) is the final result of accounting which is a summary of financial transactions.Financial statements are documents that provide information about the financial performance and position of a company. The three main types of financial statements are the income statement, the balance sheet, and the cash flow statement.
What Is Financial Statements of A company
- Income Statement: The income statement, also known as the profit and loss statement, shows a company’s revenues and expenses over a specified period of time. The statement starts with the company’s total revenue and subtracts all expenses to arrive at the net income or loss for the period.
- Balance Sheet: The balance sheet provides a snapshot of a company’s financial position at a specific point in time. It lists a company’s assets, liabilities, and equity. Assets are what a company owns, liabilities are what it owes, and equity is the difference between the two.
- Cash Flow Statement: The cash flow statement shows the inflows and outflows of cash and cash equivalents during a specified period. It is divided into three sections: operating activities, investing activities, and financing activities.
In addition to these three financial statements, companies may also provide notes to the financial statements that give more detailed information about specific items or transactions. These notes can provide additional context and help investors and other stakeholders better understand a company’s financial position and performance.
