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Financial statements are crucial summaries of a companys financial performance, presenting information about its revenues, expenses, assets, liabilities, and equity within a specific period. Heres a breakdown:
Income Statement Profit & Loss Statement: It details a companys revenues and expenses over a period usually a quarter or a year. It shows the net profit or loss by subtracting expenses from revenues.
Balance Sheet: It presents the companys financial position at a specific point in time, showcasing its assets what it owns, liabilities what it owes, and equity the ownership interest.
Cash Flow Statement: This tracks the inflow and outflow of cash within a period, categorized into operating, investing, and financing activities. Its vital for assessing a companys liquidity and ability to meet its obligations.
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