Definition - What does Financial Statement mean?
A financial statement is a detailed report of a party's finances. Financial statements can include balance sheets and income statements. They can be made for individuals, businesses or other organizations. In the context of the law, financial statements can be used by regulators to inspect a company. They can also be used in divorce court to help the judge determine how to break down financial responsibilities between divorcing spouses.
Justipedia explains Financial Statement
Financial statements can include figures such as income, cash flow, profits and losses, etc. They basically summarize the current financial position of an entity. Regulatory agencies such as the Securities and Exchange Commission can use financial statements to take a closer look at the finances of a business. This can help them to better understand a business, and the data may be useful to their investigations. For example, if a company's financial statement says that it is making $5,000,000 a year, but the SEC suspects that it is making twice that amount, then it may continue to investigate the company.