What are the three main financial statements used in business?

The three main financial statements used in business are indeed the income statement, balance sheet, and cash flow statement.

The income statement provides a summary of a company's revenues and expenses over a specific period, ultimately showing the net profit or loss. This document is crucial because it reflects the operational efficiency and profitability of a business.

The balance sheet offers a snapshot of a company's assets, liabilities, and equity at a specific point in time, giving stakeholders insight into the financial stability and liquidity of the company. It allows users to assess what the company owns and owes.

The cash flow statement illustrates how cash is generated and spent during a specific period, detailing the operational, investing, and financing activities of the business. This statement is essential for understanding how well a company manages its cash position, ensuring it can meet its obligations and invest in future growth.

Each of these financial statements serves a distinct purpose, providing critical information that aids in decision-making for management, investors, and other stakeholders.