What are financial statements and why are they important?

What are financial statements and why are they important?

Financial statements are formal records of the financial activities of a business. They provide a summary of the company's financial position, performance, and cash flows, which are crucial for decision-making.

What are the main types of financial statements?

The main types of financial statements are the balance sheet, income statement, and cash flow statement. Each serves a different purpose in assessing a company's financial health.

Can you explain what a balance sheet is?

A balance sheet is a snapshot of a company's assets, liabilities, and equity at a specific point in time. It shows what the company owns and owes.

How often should a company prepare financial statements?

Companies typically prepare financial statements quarterly and annually. However, some may do it monthly for internal management purposes.

Where can I find examples of financial statements?

You can find examples of financial statements in annual reports of publicly traded companies, on their websites, or through financial databases.