Balance sheet

Balance Sheet

A financial statement that reports a company’s assets, liabilities, and shareholders’ equity at a specific point in time. It provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders.

For example, a manufacturing company’s balance sheet might show $5 million in assets (cash, inventory, equipment), $2 million in liabilities (accounts payable, loans), and $3 million in shareholders’ equity, demonstrating the accounting equation: Assets = Liabilities + Equity.

Balance sheets help stakeholders assess a company’s financial health by showing liquidity, solvency, and financial structure. They are typically prepared monthly, quarterly, or annually as part of standard financial reporting.