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Question
13
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MREQ

Which financial statement shows a company’s profitability over time?

Companies use several types of financial statements to give investors, analysts, and regulators a clear view of their operations. The balance sheet shows what a company owns and owes at a specific point in time, reflecting its assets, liabilities, and equity. The income statement focuses on revenues and expenses to help track performance during a particular period. The cash flow statement highlights how cash moves in and out of a business, which is crucial for evaluating liquidity and solvency. Meanwhile, the statement of shareholders’ equity outlines changes in ownership interest, including dividends, stock issuance, or buybacks. Together, these documents provide a complete picture of a company’s financial health, helping decision-makers assess risks, opportunities, and long-term sustainability. Learning how to interpret each statement can give you deeper insight into a business’s strategies, strengths, and areas that may require improvement.

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