What does a statement of stockholders' equity illustrate?

A statement of stockholders' equity illustrates changes in the equity section of the balance sheet by detailing how the equity accounts have changed over a specific reporting period. This statement provides information about transactions such as new stock issued, dividends paid, and net income or loss for the period, which all impact the overall equity of the company.

The statement typically includes components such as common stock, preferred stock, additional paid-in capital, retained earnings, and treasury stock. By presenting this information, the statement gives stakeholders insights into how the company's equity is evolving, which is crucial for evaluating the financial health and stability of the business.

In contrast, the other options focus on different financial aspects that are not related to the equity section. Operating expenses are dealt with in the income statement, revenue and expenses are also part of the income statement, and liabilities are covered in the balance sheet but do not directly relate to stockholders’ equity. Thus, the answer distinctly captures the essence of the statement's function within financial reporting.