Financial Statements The three main types of financial statements will be discussed in this document. The three main types of financial statements are income statement, balance sheet, and cash flow statement. We will also talk about the owners' net worth. The document will also touch on some key points in each of the three types of financial statements and equity. The income statement will report the revenues generated and expenses incurred by the company in a specific period such as a quarter or a year. There are several main types of expenses on the income statement and they are operating income, income tax, and cost of goods sold, or COGS. Cost of goods sold is the cost of producing or producing goods sold to make more money. They reflect production such as labor, raw materials, these are direct costs. They will also vary because the quantity of goods produced will vary from day to day (Melicher, Norton, 2013). The operational partThere are three standard sections and they are investment activities, operational activities and financial activities (Melicher, Norton, 2013). Investing activities will report changes in a company's cash position resulting from losses or gains from investments in operating subsidiaries and financial markets, as well as changes in the amount of money spent on capital assets such as equipment and facilities. Operating assets are calculated by adding depreciation and amortization and EBIT, then subtracting taxes. Operating activities are money a company earns from normal business activities such as selling goods, producing goods, or providing a service. Financial assets that track a company's external activities that help a company raise capital and repay investors, an example of this is cash dividends, issuing more shares, or modifying loans. It will show investors how strong a company is