1.

An Income Statement known as a Profit and Loss Statement (P&L), is a financial statement
which reports a company's revenues and expenses over a specific period, around a quarter
or a year.

The Income Statement provides a detailed summary of a company's financial performance by

reporting its revenues, cost of goods sold, gross profit, operating expenses, net income
before taxes, taxes paid, and net income after taxes. This allows many parties such as
investors, analysts, and management to evaluate a company's profitability, revenue trends,
and cost management over time.

The Income Statement is one of the three primary financial statements, along with the
Balance Sheet and Cash Flow Statement, that companies use to report their financial
performance.

2. A balance sheet is a financial statement that provides a every activity of a company's

financial position at a specific point of time, usually at the end of a reporting period. It shows
the company's assets, liabilities, and equity.

There are many asset resources that a company owns and uses to generate revenue, such
as cash, inventory, property, plant, and equipment. Liabilities are the company's obligations,
such as loans, accounts payable, and taxes owed. Equity represents the remaining value of
the company after all liabilities are paid, which is equal to the company's assets minus its
liabilities.

The balance sheet provides valuable information about a company's financial health and its
ability to meet its obligations. By comparing a company's assets and liabilities, investors,
creditors, and analysts they can evaluate its solvency, liquidity, and profitability. They can
also identify any potential risks or opportunities that could impact the company's future
performance. Moreover, the balance sheet is often used in conjunction with other financial
statements, such as the income statement and statement of cash flows, to gain a complete
understanding of a company's financial condition.

3. Cash flow statement is a tool which is used to manage finances by tracking cash flow for an
organisation. This not only helps in evaluating the performance of company but also enables
to forecast the need of a company for short term planning. Companies usually try to maintain
their positive cash flow to execute their operations.

The statement of cash flows is important because it shows how a company generates and
uses cash, which is critical to its operations. It provides information about where the cash
came from and how it was spent, including cash received from customers, payments to
suppliers, investments in property, plant, and equipment, and payments to shareholders in
the form of dividends.

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