Question

what is financial statement?

Answer 1

Summary report that shows how a firm has used the funds entrusted to it by its stockholders (shareholders) and lenders, and what is its current financial position. The three basic financial statements are

 (1) balance sheet: which shows firm's assets, liabilities, and net worth on a stated date;

(2) income statement (also called profit & loss account): which shows how the net income of the firm is arrived at over a stated period, and

(3) cash flow statement: which shows the inflows and outflows of cash caused by the firm's activities during a stated period. Also called business financials.