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Profits

Though the major financial statements are income statement, balance sheet, statement of retained earnings, and statement of cash flows, many people believe that the most important statements are income statement and the balance sheet. Why do you think they believe this? Most people, stockholders and analysts focus on the profits of a company and usually, the income statement and the balance sheet are the first things focused on in the Financial Statements such as the 10K and Annual report. People have been conditioned to look for those when evaluating a company's profitability and therefore think they are the most important statements. Timing of the expense recognition is not important. The important thing is that all expenses eventu

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