Financial reports are formal records that outline the financial activities and position of a business or organization. They typically include key documents such as the balance sheet, income statement, and cash flow statement. These reports provide essential information about revenue, expenses, assets, and liabilities, helping stakeholders understand the financial health of the entity. These reports are crucial for decision-making by investors, creditors, and management. They help assess profitability, liquidity, and overall performance. Regularly prepared financial reports ensure transparency and compliance with regulations, making them vital for maintaining trust and accountability in the financial markets.