There are four main types of financial statements, which are as follows:

Income statement. This report reveals the financial performance of an organization for the
entire report period. It begins with sales, and then subtracts out all expenses incurred
during the period to arrive at a net profit or loss. An earnings per share figure may also be
added if the financial statements are being issued by a publicly-held company. This is
usually considered the most important financial statement, since it describes performance.

Balance sheet. This report shows the financial position of a business as of the report date
(so it covers a specific point in time). The information is aggregated into the general
classifications of assets, liabilities, and equity. Line items within the asset and liability
classification are presented in their order of liquidity, so that the most liquid items are
stated first. This is a key document, and so is included in most issuances of the financial
statements.

Statement of cash flows. This report reveals the cash inflows and outflows experienced by
an organization during the reporting period. These cash flows are broken down into three
classifications, which are operating activities, investing activities, and financing
activities. This document can be difficult to assemble, and so is more commonly issued
only to outside parties.

Statement of changes in equity. This report documents all changes in equity during the
reporting period. These changes include the issuance or purchase of shares, dividends
issued, and profits or losses. This document is not usually included when the financial
state