What information does the statement of stockholders' equity provide?

The statement of stockholders' equity provides crucial information regarding the changes in each equity account over time. This financial statement details how equity components, such as common stock, preferred stock, additional paid-in capital, retained earnings, and treasury stock, have changed during a specific period.

It typically outlines transactions that lead to changes in equity, including new stock issuances, dividends paid to shareholders, net income or losses from operations, and any other adjustments impacting equity accounts. By examining these changes, stakeholders can better understand how the company is financing its operations and returning value to its shareholders.

This information is essential because it illustrates the company's profitability, investment strategies, and any distributions to shareholders, thereby providing insight into the overall health of the company from the perspective of its equity holders.