Balance sheet

A balance sheet is a financial statement that provides a snapshot of a business’s financial position at a specific point in time.

It shows what the company owns (assets), what it owes (liabilities), and the owner’s or shareholders’ equity.

The formula behind a balance sheet is: Assets = Liabilities + Owner’s Equity.

• Assets include cash, inventory, equipment, and property.
• Liabilities might be loans, accounts payable, or other debts.
• Owner’s equity represents the residual interest in the assets after liabilities are deducted.

Businesses use the balance sheet to assess financial health, track performance, and make informed decisions. It is one of the key financial documents used in accounting and reporting.