Which financial statement is essential for determining a mature company's health?

The cash flow statement is essential for determining a mature company's health because it provides a comprehensive view of the company's liquidity and financial flexibility. This statement details how cash is generated and used in operating, investing, and financing activities over a specific period.

For a mature company, profitability might be stable; however, assessing financial health goes beyond just looking at income outcomes. The cash flow statement reveals actual cash inflows and outflows, which are crucial for understanding whether a company can sustain its operations, pay dividends, invest in growth, or withstand financial challenges.

While the balance sheet shows assets, liabilities, and equity at a single point in time, and the income statement presents revenues and expenses over a period, neither captures the timing and management of cash flows, which is vital for long-term sustainability and operational efficiency. The statement of changes in equity details how equity has changed during a period but does not address liquidity directly, making the cash flow statement the most comprehensive tool for assessing the health of a mature company.