Balance Sheet
Definition
Balance Sheet: A balance sheet shows a company's financial position at a point in time—listing assets (what you own), liabilities (what you owe), and equity (owner value). The fundamental equation: Assets = Liabilities + Equity. It complements the income statement (profitability) and cash flow statement (cash movements).
Example Usage
“Our balance sheet shows $2M in assets (mostly cash), $500K in liabilities (deferred revenue), and $1.5M in equity (raised capital minus losses).”
Common Misconceptions
Related Terms
Income Statement
An income statement (P&L) shows a company's financial performance over a period—revenue, costs, and resulting profit or loss. It tracks whether the bu...
Cash Flow Statement
A cash flow statement shows how cash moves in and out of a business over a period. It has three sections: operating (core business), investing (assets...
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