A balance sheet is a statement of a business's assets, liabilities and owner's equity as of any given date. Typically, it is prepared at the end of set periods (e.g., every quarter; annually). It is comprised of two columns. The column on the left lists the assets of the company. A balance sheet is a summary of all of your business assets (what the business owns) and liabilities (what the business owes). At any particular moment, it shows you how much money you would have left over if you sold all your assets and paid off all your debts (i.e. it also shows ‘owner’s equity’). It displays the company’s total assets and how the assets are financed, either through either debt or equity. It can also be referred to as a statement of net worth or a statement of financial position. It is an essential tool used by executives, investors, analysts and regulators to understand the current financial health of a business. It is generally used alongside the two other types of financial statements: the income statement and the cash flow statement.

Saket Kumar

116 resources

0

3

0

Like