The Income Statement, Balance Sheet, and Cash Flow Statement are the three primary financial statements.
When it comes to their importance, the Income Statement reveals a company’s revenue and costs as well as its ultimate net income over a period of time.
The assets of a firm, such as a plant, property and equipment, cash, inventory, and other resources, are represented on the Balance Sheet. Liabilities, which comprise Shareholders’ equity, debt, and accounts payable, are also reported. The assets are always equal to the liabilities plus shareholders equity on the balance sheet.
Finally, a Cash Flow Statement shows how much money has changed hands. It shows the cash flow generated by the company’s operating, investing, and financing operations.