Definition A balance sheet is a financial statement that provides a snapshot of an entity’s financial condition at a specific point in time. It outlines the company’s assets, liabilities and shareholders’ equity, offering a comprehensive overview of its financial health. This pivotal document is fundamental for investors, managers and creditors to assess the entity’s stability, liquidity and capital structure.
Key Components Assets: Resources owned by the company, expected to bring future economic benefits.
Definition The Cash Flow Statement (CFS) is a financial statement that shows the inflow and outflow of cash during a specific period. It tracks how cash is generated and used in a business through its operational, investing and financing activities. Unlike the Income Statement, which focuses on profitability, the Cash Flow Statement emphasizes the actual cash position of a company, providing stakeholders with insight into its liquidity and financial health.
Definition An income statement, also known as a profit and loss statement (P&L), is a financial report that summarizes a company’s revenues, expenses, and profits or losses over a specific period, typically a quarter or a year. It provides insight into the company’s operational efficiency, profitability, and overall financial performance. The income statement is one of the three main financial statements, alongside the balance sheet and cash flow statement, and is crucial for investors, analysts, and management to assess the financial health of a business.