Balance sheet

A balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time, often at the end of a financial year or accounting period.

A balance sheet is divided into two main sections:

1. Assets

What the company owns or has a right to:

• Current assets, such as cash, trade receivables, and inventory

• Non-current assets, such as real estate, machinery, and equipment

2. Liabilities and Equity

How the assets are financed:

• Liabilities, such as loans and amounts owed to suppliers

• Equity, consisting of owners' contributions and profits retained in the business

A balance sheet is based on the accounting equation:

Assets = Liabilities + Equity