The balance sheet shows a company’s assets, liabilities, and equity at a specific date, giving insight into financial stability.
The cash flow statement shows how cash moves in and out of a business, categorized into operating, investing, and financing activities.
The current ratio, calculated as current assets divided by current liabilities, assesses a company’s short-term financial health.
The debt-to-equity ratio measures financial leverage by comparing a company’s total liabilities to its shareholder equity.
The income statement reports a company’s financial performance over a period, including revenues, expenses, and net profit or loss.
The accrual accounting principle states that revenue should be recognized when earned, aligning income with the related expenses.
