Which financial document provides insights into a company’s solvency at a specific point in time?

The Balance Sheet is the financial document that offers insights into a company’s solvency at a specific point in time. It presents a snapshot of a company's financial position by detailing its assets, liabilities, and equity. To assess solvency, one can analyze the relationship between total assets and total liabilities; this relationship indicates whether the company can meet its long-term obligations.

When reviewing the Balance Sheet, if total assets exceed total liabilities, it suggests the company is solvent and capable of settling its debts. Conversely, if liabilities surpass assets, it may indicate potential solvency issues. This provides essential insight not only for investors but also for creditors and stakeholders who need to understand the company’s financial health.

The other financial documents serve different purposes. The Income Statement reflects a company's performance over a period, detailing revenues and expenses, which helps assess profitability rather than solvency. The Cash Flow Statement tracks cash inflows and outflows across operating, investing, and financing activities, focusing on liquidity rather than the overall solvency. The Equity Statement, often part of the financial statements, summarizes changes in equity over a period without specifically addressing the company’s capacity to meet its long-term obligations. Therefore, the Balance Sheet is the primary document used to evaluate a company's solvency at a