Balance Sheet Analysis

Balance sheet analysis involves reviewing a company’s financial position at a specific point in time. It summarizes assets (what the company owns), liabilities (what it owes), and shareholders' equity (the owner's stake). By examining these elements, stakeholders can assess financial health and stability, understand liquidity, and evaluate long-term viability. Key ratios derived from the balance sheet, such as the debt-to-equity ratio, provide insights into risk and financial structure. Overall, balance sheet analysis helps investors, creditors, and management make informed decisions regarding the company's financial strategies and performance.