3 Financial Statements_ Balance Sheet, Income _ Cash Flow

The financial statements are a record of the financial activities of the business. There are three main financial statements, a balance sheet, an income statement, and a statement of cash flows. Let's start by reviewing the balance sheet, also referred to as the statement of financial position. The balance sheet shows what a company owns, referred to as its assets, what it owes, referred to as liabilities, and what it's worth, referred to as equity, at a particular point in time. The income statement, also known as a statement of profit and loss, or statement of operations, shows what a company has earned as revenue, what it has paid as expenses, and what the resulting profit or loss is over a certain period of time. The statement of cash flows, or cash flow statement, shows the actual cash movements of a business. It shows how much cash the company has brought in, and how much it is paid out, organized into three categories. Cash from operating activities, cash from investing activities, and cash from financing activities.