Balance Sheet
A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It lists the company's assets (what it owns), liabilities (what it owes), and shareholders' equity (the owners’ claim on assets). The fundamental equation is: Assets = Liabilities + Equity. This means that everything the company owns is financed either by borrowing (liabilities) or by the owners’ investment (equity). Balance sheets help investors and stakeholders assess the financial health and stability of a business, guiding decisions on investments or management.
Additional Insights
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A balance sheet is a financial statement that provides a snapshot of a company’s financial position at a specific moment in time. It shows what the company owns (assets), what it owes (liabilities), and the difference between the two, which represents the owner's equity. In simple terms, the balance sheet illustrates how resources are funded—whether through borrowing or owners' investment. It follows the fundamental equation: Assets = Liabilities + Equity. This statement helps investors and stakeholders assess the financial health and stability of the business.