Types of Financial Statements
Balance sheet: It is commonly called the final position statement. It is an important financial statement that indicates the monetary value of a business's assets, liabilities, and capital at the end of the financial period. It is the most appropriate and summarized document providing relevant information regarding the firm’s insight.
Income statement or profit & loss account: Income statements, also called the statements of revenue and expense or the profit and loss statements, are important financial statements that provide information about the revenues, costs, and expenses associated with producing that revenue and the amount of profit or loss experienced by a business firm in an accounting period. Analyzing the organized financial information produced in the income statements provides an in-depth insight into the company’s net performance, business health, and financial position.
Cash flow statements: Cash flow statements are important financial statements that provide information about the flow of money in a company and how well the company manages that cash flow. Cash flow statements provide an insight into whether a business is generating an optimal or sufficient amount of cash needed to pay any debts carrying day-to-day operations.
Statements of shareholders’ equity: Statements of shareholders’ equity, also referred to as the statements of owners’ equity or statements of changing equity, are important financial documents that provide information about the company's retained earnings.