A formal record of the financial activities and snapshot of a business's financial health.
Financial statements typically include four basic financial statements, accompanied by a management discussion and analysis:
Balance sheet: also referred to as statement of financial position or condition, reports on a company's assets, liabilities, and Ownership equity at a given point in time.
Income statement: also referred to as Profit and Loss statement (or a "P&L"), reports on a company's income, expenses, and profits over a period of time. Profit & Loss account provide information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state.
Statement of retained earnings: explains the changes in a company's retained earnings over the reporting period.
Statement of cash flows: reports on a company's cash flow activities, particularly its operating, investing and financing activities.