Financial statements are records that outline the financial activities of a business, an
individual or any other entity. Financial statements are meant to communicate the financial
information of the entity in question as clearly and accurately as possible for both the entity and
for readers. Financial statements for businesses usually include: income statements, balance
sheet, statements of retained earnings and cash flows, as well as owner’s equity statements and
other possible statements.(n.d.)
I believe the best statement for a company’s financial health is the balance sheet. This is
because a balance sheet does not report just one thing. A balance sheet reports the assets,
liabilities and owner’s equity. This type of financial statement allows the owner and readers to
easily read all cash flows in and out, all payments in and out and owner’s assets and equity at any
given time.
