Financial statements are formal records that summarize a company’s financial performance for a specific period.
For example, a lender reviewing a $250,000 loan application requests three years of financial statements — including the income statement, balance sheet, and cash flow statement — to assess revenue trends, profitability, debt levels, and the business's ability to repay.
Why it matters: They are the universal language of business, required to diagnose problems, secure funding, and sell the company.
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