Balance Sheet

Balance Sheet statement tells you a company’s financial strength at a specific snapshot in time.

From the balance sheet you learn:

  • How strong the business is financially
  • Whether short-term obligations can be met
  • The amount of debt a company has
  • The book value of the company

Assets are what you own:

  • Cash
  • Accounts Receivable (money owed to you)
  • Inventory (product in your possession but not sold)
  • Fixed Assets (property, equipment, machinery, or vehicles)
  • Intangible Assets (software, licenses, trademarks, or goodwill)

Liabilities are what you owe:

  • Accounts Payable (money owed to vendors)
  • Credit Card Payables (just a different accounts payable)
  • Short-term debt (obligations to pay)
Info

Current Liabilities (owed in < 1 year)
Long-term liabilities (owed in > 1 year)


Equity is how much the company is worth on paper:

  • Money put in the business
  • Money taken out of the business
  • Earnings retained in the company

Formulas: