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so what is a financial statement its not actually rather for documents the primary purpose of those documents is to summarize the financial information of a company and comply with the law by providing an honest and transparent view of the financial situation and performance of that company as a company is a complex thing to summarize it cannot be done on a single document and this is why four documents are needed the balance sheet the income statement the cash flow statement and the statement of changes in equity those four documents serve the objective of looking at the finances of the company from four different angles to give the reader a complete and well-rounded view of the financial situation and performance of the company it is also a mean of facilitating the exchanges between all the stakeholders by providing a common framework to report vital information about the company the balance sheet summarizes what the company owns to judge the value of its properties machinery or any