Dates are really important when you're reading financial statements.

Let's start by looking at the balance sheet.

I've got two balance sheets. The first one is at the end of period one. So let's say that's the 31st of December year one and the second balance sheet at the end of year 2 December 31st year two.

A balance sheet describes a snapshot at the period end. It really tells me the company's assets liabilities and equity at just that moment in time.

But what if I wanted to understand what happened in between the two balance sheets? Well the income statement and the cash flow statement are going to help us out. They are both summaries for the period. And if you look at the dates at the top of these items, it will say a summary for the period ended year 2. A good example to illustrate this point is cash, your balance sheet at the end of period one might have cash of 100 and the balance sheet at the end of period two might have cash of 120.What happened between the 100 and the 120 is going to be described in much more detail on the cash flow statement for period two showing your cash going in and out for that period. Another reason that dates are really important is when you look at the footnotes. Now, your footnotes might be a couple of pages or many hundreds of pages and it can often be very difficult to decide whether you're looking at a note for a balance sheet item or an income statement item or a cash flow statement item the dates can help. If the footnote says that you're looking at a specific date chances are you're looking at a balance sheet item alternatively if the footnotes is that you're looking for the period or for the period ended a specific date then that is going to be an income statement or a cash flow statement items note.