Definition
The balance sheet provides a snapshot of what a company owns (assets), owes (liabilities), and the residual value for shareholders (equity). The fundamental equation is Assets = Liabilities + Equity. It reveals financial health, leverage, and liquidity.
Formula
Assets = Liabilities + Shareholders' Equity
Example
Apple's balance sheet shows $352B in assets, $287B in liabilities, and $65B in shareholders' equity. The equation balances: $352B = $287B + $65B.
FAQ
What is Balance Sheet?
A financial statement showing assets, liabilities, and equity at a point in time.
How do you calculate Balance Sheet?
A common formula for Balance Sheet is: Assets = Liabilities + Shareholders' Equity
Why is Balance Sheet important?
Balance Sheet helps investors evaluate financial statements and make more informed decisions.