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financial statement

fy-NAN-shul STAYT-munt /faɪˈnænʃəl ˈsteɪtmənt/

nounB2TOEFLIELTS

formalbusiness

A formal record of the financial activities and position of a business, person, or other entity.

Financial statements are standardized reports (like the balance sheet, income statement, and cash flow statement) that provide a snapshot or summary of an entity's financial health over a period. They are crucial for decision-making and external reporting.

The story behind the word. The word 'financial' comes from the Old French 'finance,' meaning 'end, settlement of a debt.' This root, 'fin,' meaning 'end,' highlights how finance often deals with the conclusion of transactions or the ultimate state of affairs. 'Statement' simply means a formal declaration. So, a 'financial statement' is a formal declaration of the 'end' or current state of financial matters.

Word relationships

financial report: Often used interchangeably, though 'statement' implies a specific set of standardized documents.
accounts: More general, can refer to the raw data; 'financial statement' is the summarized, presented form.

Collocations

annual financial statement
quarterly financial statement
prepare financial statements
analyze financial statements

Example sentences

"Investors eagerly awaited the company's annual financial statement to assess its profitability and overall economic performance." Companies releasing their financial statements.
"The auditor meticulously reviewed each component of the financial statement, including the balance sheet and income statement." The components of a financial statement.
"Analysts use financial statements to compare companies, evaluate investment opportunities, and predict future trends." Using financial statements for analysis.

Memory hook

A FINANCIAL STATEMENT STATES the financial position of a company. States finances

When not to use

Don't use 'financial statement' for a casual list of transactions or a personal budget; it refers to specific, formal reports prepared according to accounting standards.

Fun facts

There are typically three main financial statements: the Balance Sheet, the Income Statement, and the Cash Flow Statement.
Publicly traded companies are legally required to release their financial statements regularly to ensure transparency for investors.

Explore more words

statement, account, net worth, allocation, testimony, balance