Income statement is important because it shows whether a business is making a profit or a loss during a specific period, helping owners, investors, and lenders assess financial performance and future potential.

The statement of changes in equity is important because it explains how a company’s ownership value evolves over time, showing movements in share capital, retained earnings, reserves, and dividends. It connects profit performance with shareholder value.

A balance sheet is one of the core financial statements that provides a snapshot of a company’s financial position at a specific point in time. It shows what the business owns (assets), what it owes (liabilities), and the residual interest belonging to the owners (equity).

A cash flow statement is one of the four main financial statements, and it’s crucial because it shows how money actually moves in and out of a business during a specific period. Unlike the income statement (which can include non-cash items like depreciation), the cash flow statement focuses only on real cash transactions.