Financial statements are formal records that provide an overview of a company's financial performance and position. They typically include three main documents: the income statement, which shows revenues and expenses; the balance sheet, which outlines assets, liabilities, and equity; and the cash flow statement, which tracks the flow of cash in and out of the business. These statements are essential for stakeholders to assess the company's profitability, liquidity, and overall financial health. These documents are used by various parties, including investors, creditors, and management, to make informed decisions. Financial statements are usually prepared according to specific accounting standards, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). Regularly reviewing these statements helps ensure transparency and accountability in financial reporting.