Financial statements give investors, regulators, lenders, and analysts a clear view of how a company is doing. They are standardized documents that follow accounting rules (such as GAAP or IFRS) so that companies can be compared fairly. These reports provide insight into revenue, expenses, profit, assets, debt, and how cash moves through the business.
There are three primary financial statements:
The income statement shows profitability by listing revenue, costs, and net income.
The balance sheet shows what the company owns and owes at a specific point in time.
The cash flow statement explains the movement of cash in operating, investing, and financing activities.
Together, these reports help people understand both short-term performance and long-term stability.
Financial statements also include notes, disclosures, and explanations. These sections provide context behind the numbers, such as accounting methods, risk details, debt terms, or changes in business conditions. This additional information is essential for understanding how the raw numbers were created and what they truly mean.
Financial statements help investors make informed decisions, evaluate a company’s health, and identify risks or opportunities. They provide a standardized foundation for financial analysis.
The statements are connected. Net income from the income statement feeds into shareholders’ equity on the balance sheet and into operating cash flow. The balance sheet shows changes in assets and liabilities that influence cash flow, while the cash flow statement explains how cash actually moved during the period. Reviewing all three gives a full view of performance, stability, and liquidity.
Notes explain how the numbers were calculated, what assumptions were used, and whether there were any major changes in operations or accounting methods. They reveal risks such as legal issues, debt covenants, or revenue concentration. Without these notes, analysts might misunderstand the financial statements or miss important warning signs.
Investors examine trends in revenue, profit, margins, debt levels, cash flow, and asset values. They calculate ratios to judge efficiency, liquidity, and risk. They also compare results with competitors and look for consistent improvement over time. Financial statements form the foundation for valuation, forecasting, and investment strategy.
Before investing, an analyst reviews a company’s quarterly financial statements. They check revenue growth, compare debt levels on the balance sheet with cash flow strength, and read disclosures about upcoming risks. The combined information helps them decide whether the company is financially stable and worth investing in.
FinFeedAPI’s SEC API provides structured access to financial statements from public company filings, allowing users to analyze income statements, balance sheets, and cash flow data quickly and consistently.
