Financial statements provide information of value to company officials as well as to various outsiders, such as investors and lenders of funds. Publicly owned companies are required to periodically publish general-purpose financial statements that include a balance sheet, an income statement, and a statement of cash flows. Some companies also issue a statement of stockholders' equity and a statement of comprehensive income, which provide additional detail on changes in the equity section of the balance sheet. Financial statements issued for external distribution are prepared according to generally accepted accounting principles (GAAP), which are the guidelines for the content and format of the statements. In the United States, the Securities and Exchange Commission (SEC) has the legal responsibility for establishing the content of financial statements, but it generally defers to an independent body, the Financial Accounting Standards Board (FASB), to determine and promote accepted principles.

The balance sheet, also known as the statement of financial position or condition, presents the assets, liabilities, and owners' equity of the company at a specific point in time. The assets are the firm's resources, financial or nonfinancial, such as cash, receivables, inventories, properties, and equipment. The total assets equal (balance) the sources of funding for those resources: liabilities (external borrowings) and equity (owners' contributions and earnings from firm operations). The balance sheet is used by investors, creditors, and other decision makers to assess the overall composition of resources, the constriction of external obligations, and the firm's flexibility and ability to change to meet new requirements.

Firms frequently issue a separate statement of stockholders' equity to present certain changes in equity, rather than showing them on the face of the balance sheet. The statement of stockholders' equity itemizes the changes in equity over the period covered, including investments by owners and other capital contributions, earnings for the period, and distributions to owners of earnings (dividends) or other capital. Sometimes companies present a statement of changes in retained earnings rather than a statement of stockholders' equity. The statement of changes in retained earnings, also known as the statement of earned surplus, details only the changes in earned capital: the net income and the dividends for the period. Then the changes in contributed capital (stock issued, stock options, etc.) must be detailed on the balance sheet or in the notes to the financial statements.

The income statement, also known as the statement of profit and loss, the earnings statement, or the operations statement, presents the details of the earnings achieved for the period. The income statement separately itemizes revenues and expenses, which result from the company's ongoing major or central operations, and the gains and losses arising from incidental or peripheral transactions. Certain irregular items (such as discontinued operations, extraordinary items, effects of accounting changes) are presented separately, net of tax effect, at the end of the statement. When revenues and gains exceed expenses and losses, net income is realized. Net income for the period increases equity. The results of the firm's operating activities for the period as presented in the income statement provide information that can be used to predict the amount, timing, and uncertainty of future cash flows. This statement is useful to investors, creditors, and other users in determining the profit ability of operations. The income statement must also show earnings per share (EPS), where the net income is divided by the weighted average number of shares of common stock outstanding. Since EPS scales income by the magnitude of the investment, it allows investors to compare diverse companies of different sizes; hence, investors commonly use it as a summary measurement of firm performance.

In 1998, the FASB required that companies present a separate statement that classifies all items of other comprehensive income by their nature. Other comprehensive income includes all equity changes not recorded in the income statement or in the statement of changes in retained earnings and that do not result from contributions by owners. In addition to providing a separate statement, companies must display the total of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of the balance sheet.

The statement of cash flows replaced the statement of changes in financial position in 1987 as a required financial statement for all business enterprises. The statement of cash flows presents cash receipts and payments classified by whether they stem from operating, investing, or financing activities and provides definitions of each category. Information about key investing and financing activities not resulting in cash receipts or payments in the period must be provided separately. The cash from operating activities re ported on the statement of cash flows must be reconciled to net income for the period. Because GAAP requires accrual accounting methods in preparing financial statements, there may be a significant difference between net income and cash generated by operations. The cash-flow statement is used by creditors and investors to determine whether cash will be available to meet debt and dividend payments.

Financial statements include notes, which are considered an integral part of the statements. The notes contain required disclosures of additional data, assumptions and methodologies employed, and other information deemed useful to users.

The financial statements of publicly owned companies also include an auditor's report, indicating that the statements have been audited by independent auditors. The auditor's opinion is related to fair presentation in conformity with GAAP.

The external financial statements required for not-for-profit organizations are similar to those for business enterprises, except that there is no ownership component (equity) and no income. Not-for-profit organizations present a statement of financial position, a statement of activities, and a statement of cash flows. The financial statements must classify the organization's net assets and its revenues, expenses, gains, and losses based on the existence or absence of donor-imposed restrictions. Each of three classes of net assets—permanently restricted, temporarily restricted, and unrestricted—must be displayed in the statement of financial position, and the amounts of change in each of those classes of net assets must be displayed in the statement of activities. Governmental bodies, which are guided by the Governmental Accounting Standards Board (GASB), present general-purpose external financial statements that are similar to those of other not-for-profit organizations, but they classify their financial statements according to fund entities.