What does the term "financial statement" encompass?

The term "financial statement" refers to a comprehensive collection of reports that provide a detailed overview of a company's financial performance and position. This includes the income statement, which details the company’s revenues and expenses, thus showing profitability over a specific period, the balance sheet, which presents the company's assets, liabilities, and shareholders' equity at a specific point in time, and the cash flow statement, which tracks the flow of cash in and out of the business. Together, these reports give stakeholders a holistic view of the company's financial health, helping them make informed decisions regarding investments, lending, and management strategies. This collective information is critical for assessing the overall financial stability and performance of the organization.