What financial document is primarily used in the evaluation of a company's net worth?

The balance sheet is the primary financial document used to evaluate a company's net worth, also known as shareholders' equity. This document provides a snapshot of a company's financial position at a specific point in time by listing its assets, liabilities, and equity.

Assets represent what the company owns, including cash, inventory, property, and equipment. Liabilities reflect what the company owes, such as loans, accounts payable, and other obligations. The net worth or equity is determined by subtracting total liabilities from total assets. This calculation illustrates the residual interest of the owners in the company after all debts have been settled.

In contrast, the income statement focuses on the company's financial performance over a specified period, detailing revenues and expenses to show net income or loss, but it does not provide a direct assessment of net worth. The cash flow statement tracks the inflows and outflows of cash, providing insight into liquidity rather than net assets. An audit report gives an opinion on the fairness of the financial statements but does not directly report on the company's net worth. Hence, the balance sheet is the most relevant document for assessing a company's net worth.