Within a business or a company, financial evaluation and choice-making revolve on the main financial records in accounting. The balance sheet, cash flow statement, income statement (sometimes referred to as the profit and loss statement), and statement of equity for shareholders belong to those previously mentioned statements. Because of that, a financial statement provides a different perspective on the performance and financial health of a company, thus enabling investors to make informed decisions. In this case, the balance sheet offers an overview of the company's financial standing at a specific point in time by detailing the assets, liabilities, and shareholder control that the company has. The aforementioned statement gives an accurate representation of the company's financial health and cash flow since it applies to the basic accounting equation: assets equal liabilities + owners equity.

A full account of the company's financial performance for a particular amount of time, usually a quarter or a year, is given in the Statement of Income, that is a supplement to the Balance Sheet. It shows the entire sum of money that the company earned and spent during that time. resulting in a profit or loss at the conclusion. Analyzing this statement is crucial for deciding if the business is successful and has efficient operational leadership. It reveals costs and expenditures related to producing income. Analysts are able to observe trends in sales and how expenses are handled when examining information over an assortment of time periods. This information assists companies get ready for the years to come.

In the meanwhile, the cash flow statement can be utilized to assess the value of money arriving into and heading from investments, financing, and day-to-day operations. This statement is essential for finding out how well the company controls its money and guaranteeing that it has enough cash on hand to pay its bills and connect its financial responsibilities. The cash flow statement shows the actual quantity of cash which the company is putting in and spending at the time, as compared to the income statement, which uses an alternate way of counting money. To put it simply, the statement of shareholders' equity shows how ownership of a company changes over time, taking into factors such as payments of dividends, earnings kept, and share acquisitions or sales. Together, these financial statements offer an accurate depiction of the company's financial health and operational results, helping managers, lenders, and investors to make sound financial choices.