What does a balance sheet primarily reflect?

A balance sheet primarily reflects a company's financial position at a specific point in time, specifically highlighting the relationship between its assets and liabilities. It provides a snapshot of what a company owns (assets) and what it owes (liabilities), allowing stakeholders to evaluate the company's net worth or equity. This format helps in understanding the financial health of the business, indicating whether it has enough assets to cover its liabilities.

In addition to this primary focus, the balance sheet offers important insights into a company's liquidity and capital structure. By comparing the values of assets to those of liabilities, investors and analysts can assess the company's financial stability and risk exposure, making option C the most accurate description of a balance sheet’s purpose.

The other options mention aspects like operational performance, revenue versus expenses, and cash flows, which are typically represented in other financial statements, such as the income statement or cash flow statement, rather than the balance sheet.