What statement reflects a firm’s financial performance over a period of time?

The profit and loss statement, also known as the income statement, is crucial in reflecting a firm’s financial performance over a specific period. This statement summarizes revenues, costs, and expenses to illustrate how much profit or loss the business has generated during that particular timeframe. It provides valuable insights into the operational efficiency and profitability of the firm, allowing stakeholders to assess overall financial health.

In contrast, the balance sheet presents a snapshot of a company’s assets, liabilities, and equity at a single point in time, rather than over a period. The statement of cash flows details the inflows and outflows of cash over a period but does not directly summarize profit or loss. The equity statement focuses on changes in equity but does not provide a comprehensive overview of financial performance. Thus, the profit and loss statement is the most appropriate choice for evaluating the firm's financial performance over time.