Balance sheet assets liabilities equity. We discuss balance sheet structure assets liabilities equity balance sheet analysis with examples of colgate and more. Put the most valuable business tool to work for you. In financial accounting a balance sheet or statement of financial position is a summary of the financial balances of an individual or organization whether it be a sole proprietorship a business partnership a corporation private limited company or other organization such as government or not for profit entity.
They are amounts owed to creditors for a past transaction and they usually have the word payable in their account title. Every balance sheet must balance. It shows a companys assets liabilities and equity accounts.
Assets liabilities and ownership equity are listed as of a specific date such. The total value of all assets must be equal to the combined value of all liabilities and shareholder equity. Liabilities are obligations of the company.
A balance sheet reports a companys assets liabilities and shareholders equity at a specific point in time and provides a basis for computing rates of return and evaluating its capital. A condensed statement that shows the financial position of an entity on a specified date usually the last day of an accounting period. How to read a balance sheet.
Article summary setting up your balance sheet preparing the assets section preparing the liabilities section calculating owners equity and totals community qa 14 references along with the income statement and the statement of cash flows the balance sheet is one of the main financial statements of a business. The balance sheet is the key to everything from efficient business operation to accurate assessment of a companys worth. For example if.
One huge problem is that the fair market value of many assets can be very different from the book values shown here. Balance sheet data is based on a. Guide to what is balance sheet.
The balance sheet shows what a company owns and what it owes. The difference is what the company is worth at least on paper.