Ans. Financial statements are the written records of a business's financial situation, which include the standard reports like the balance sheet, income or profit, and loss statements, and also the cash flow statement. In a practical sense, the financial statements are a summation of the financial position of an entity at a particular time period.The balance sheet, income statement, and cash flow statement each of these offers a unique detail with information that is all interconnected. Together these three statements give a comprehensive portrait of the company's operating activities and its performance.