What is financial reporting?

Income statement
While a balance sheet reviews current activities, the income sheet tracks these processes over a longer period. Some businesses track income statements quarterly and use these documents to monitor financial processes throughout the year. The income statement shows performance for revenue, net income, expenses and earnings per capital share if companies open shares on the stock exchange. The income statement is the same document for reporting profits and losses, and some businesses refer to the income statement as the profit-and-loss statement, or P&L statement. There are several key elements on this document:

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  Operating revenue, which accounts for selling products or services
  
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  Net and gross revenues, including total sales revenue and remaining revenue after subtracting costs
  
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  Nonoperating revenue from accrued interest, investment returns, royalty payments, capital gains
  
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  Primary expenses, including cost of goods sold (COGS), depreciation and selling, general and administrative costs (SG&A)
  
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  Secondary expenses, like debt or loan interest, asset loss and capital loss
  

Related: How To Read an Income Statement (Single-Step and Multi-Step)
Cash flow statement
The cash flow statement is important for measuring the efficiency with which companies generate cash to pay down debts. Documentation of cash flow also encompasses how well businesses fund operations and investments, showing the ongoing activities that generate revenue to support expenses. Accurate cash flow statements are important for understanding the efficiency of current practices, spending activities and revenue generation.
The cash flow statement can also provide investors with valuable insight into whether a business presents a higher investment risk. Unlike the balance sheet and income statement that require some calculations to record financial values, the cash flow statement typically comprises three key elements:

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  Operational activities, including accounts receivable and payable, inventories, wages, income tax and cash receipts
  
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  Primary investment activities, including the generation and use of investment earnings, asset sales, issued loans or credit and payments from acquisitions or mergers
  
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  Secondary investment activities, including fixed-asset purchases for equipment, office space or property
  
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  Financing activities, including stock repurchases, payable dividends, debt repayments and issuance, cash from investors and cash payments shareholders