Financial performance refers to how well a company or organization manages its financial resources to generate profit and sustain growth. It is typically assessed through key metrics such as revenue, expenses, profit margins, and return on investment. These indicators help stakeholders understand the financial health and operational efficiency of the entity. Investors and analysts often use financial statements, including the income statement, balance sheet, and cash flow statement, to evaluate financial performance. By analyzing these documents, they can make informed decisions about investing, lending, or managing the organization, ensuring that it meets its financial goals and obligations.