Managers should have a good understanding of the company in order to make an informed judgment on the financial position and operating performance of the entity. The balance sheet, the income statement, and the statement of cash flows are the primary documents analyzed to determine the company’s financial condition. The balance sheets give the company’s position in terms of its assets, liabilities, and equity or net worth, while the income statement gives the company’s sources of revenue, expenses, and net income. The statement of cash flows allows you to analyze the company’s sources and uses of cash. These financial statements are included in the annual report.