Which of the 4 financial statements is most important and why?

Answer 1

They are all important, but the relative importance of each of them depends on the company in question. For instance, for a growth company flush with cash from a recently completed IPO the income statement would most likely be considered the most "important" financial statement. For a company which experiences large amounts of non-cash income (such as through sales to a joint venture) or irregularly spaced cash payments (such as a developmental biotech or R&D company), the statement of cash flows might be the most "important." For a company in dire financial straits, investors would likely consider the balance sheet the most "important." Bottom line, it depends on the company and its circumstances.

Answer 2

That would depend on what purpose you have. If you are an external investor or government agency, the Balance sheet would be most important as it gives a snapshot of that company's status for that ending period. Investors need to know that the company is doing what it can to maximize their returns. Government agencies (namely the SEC), use the Balance Sheet for compliance reasons among others.

However, the Statement of Cash Flows and Income Statement might be more valuable to a financier where they care about the timing of cash flows coming in and out as opposed to accountants where they care about accruals over a given period.

Answer 3

The balance sheet. It provides the detailed information on the companies assets, liabilities and shareholders equity. It is overall a snapshot.