The balance sheet (statement of financial position) shows assets, liabilities, and equity at a point in time. The profit and loss account (income statement) shows revenues, expenses, and profit over a period. These are the two core statements used to assess supplier stability and performance. The cash flow statement is useful but supplementary, while chairman’s statements are narrative, not financial records. Responsible sourcing emphasises using balance sheet and P&L analysis to evaluate supplier financial strength, ensuring continuity of supply and risk management.