Financial statement

A financial statement is like a report card for a company. Just like your report card shows your grades in different subjects, a financial statement shows how much money a company has made and spent in different areas.

On a financial statement, you will see a thing called balance sheet which shows the company’s assets (what they own), liabilities (what they owe), and equity (what’s left over after they pay off their debts).

Another thing you will find on a financial statement is an income statement which shows how much money the company made from its business activities and how much money they spent to make that money. For example, if a company sells ice cream, they would list the money they made from selling ice cream and how much it cost to make the ice cream.

Lastly, you will see a cash flow statement which shows how much cash came into the company and how much went out. This is important because having cash is what allows a company to pay their bills and invest in new things.

Overall, a financial statement tells us how well a company is doing financially and if they are making enough money to stay in business for a long time.