Question

which financial statement would investors of a bank be interested in?

Answer 1

All 3 financial statements: Balance sheet, income statement and statement of cash flow are important for an investor. The major conclusions that can be made from each statement are as follows:

• Balance sheet: This statement gives the investor an idea about how big a bank is and how the bank's assets are financed i.e. how much debt and equity does the bank have.
• Income statement: This statement gives an idea about the profitability of the bank. All an investor wants at the end of the day is a return on his investment. This is why, the income statement is highly important.
• Statement of cash flow: This statement gives an idea about how well is the bank able to meet its short term and long term cash requirements.

So, all these are very important for an investor to be able to make an informed decision.