Balance Sheet

What is a Balance Sheet?

The Balance Sheet is a key financial statement that provides an overview of a company's financial standing at a particular moment. It is also known as the statement of financial position and outlines what the company owns (assets), what it owes (liabilities), and the shareholders' equity at a specific point in time.

Short Description: A financial statement that provides a snapshot of a company's financial position at a specific point in time, showing its assets, liabilities, and shareholders' equity.

• Assets: Economic resources controlled by the company, expected to provide future benefits.
• Liabilities: Obligations or debts the company needs to settle, often representing claims creditors have on the company's assets.
• Shareholders' Equity: The residual interest in the company's assets after deducting liabilities, representing the owner's claim on the company's resources.

Balance Sheets are essential for stakeholders to determine the financial health, liquidity, and capital structure of a company. They are typically prepared at the end of accounting periods and serve as a critical tool for financial analysis and decision-making.