Accounting Class Notes - Financial Statements

The four key financial statements are: income statement, balance sheet, cash flow statement, and
statement of changes in equity.

The income statement shows revenues and expenses, leading to net income. The balance sheet
presents assets, liabilities, and equity at a point in time.

Cash flow statement breaks cash flows into operating, investing, and financing activities.

Importance: Investors and creditors rely on financial statements to evaluate profitability, liquidity,
solvency, and performance trends.