The Core Financial Statements

Every company tells its financial story through four main statements:

• Balance Sheet: Shows a company's assets, liabilities, and equity at a specific point in time.
• Income Statement: Reveals revenues, expenses, and profits over a period.
• Statement of Cash Flows: Details cash inflows and outflows from operations, investing, and financing.
• Statement of Changes in Equity: Tracks changes in owners' interest.

Importance of Disclosures

Disclosures are the notes that clarify, explain, or provide additional context to the numbers in the statements. They help users truly understand what's going on behind the scenes.

Key Points

• Disclosures can include accounting policies, pending lawsuits, or details about debt.
• They ensure transparency and prevent misunderstandings.

Real-World Application

Investors, lenders, and regulators all rely on these statements and disclosures to make big decisions, like approving a loan or investing in a company.