A financial statement is a formal record that summarizes the financial activities and position of a business, organization, or individual. It provides essential information about assets, liabilities, and equity, helping stakeholders understand the financial health of the entity. Common types of financial statements include the balance sheet, income statement, and cash flow statement. These documents are crucial for decision-making, as they allow investors, creditors, and management to assess performance and make informed choices. By analyzing a financial statement, one can evaluate profitability, liquidity, and overall financial stability, which are vital for the success of any business or organization.