Term Of The Week – What Is A Financial Statement?

It is a summary report that shows how a firm has used the funds entrusted by its shareholders and lenders, and what the current financial position is.  the three basic financial statements are:

1) The balance sheet which shows the assets and liabilities and the net worth on a selected date

2) Income statement also called profit and loss which shows the net income of the firm over the stated period and

3) Cash flow statement which shows the inflows and the outflows of cash caused by the firms activities during a stated peiod, also called business financials