Discuss the four basic financial statements commonly used in security analysis.

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The four basic financial statement are 1) Balance sheet 2)Income statement 3) Statement of changes in equity 4) Statement of cash flows

Balance sheet reports financial position of business at a point of time.Balance sheet consists of three element- Asset,Liability & Equity. Assets= Liability+Equity

Income statement reports financial performance of the firm over a period of time.The elements of Income statement are revenue,expenses & other income

Statement of changes in equity reports the amounts and source of changes in equity investors investment in the firm over a period of time

statement of cash flows reports the company's cash receipts and payments. These cashflows are classified as-

Operating cashflow- Includes transaction involve the normal business of the firm

Investing Cashflow - Includes acquistion or sale of property

Financing cash flow- Resulting from issuance of firms debt and equity securities

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