Balance Sheet

The term balance sheet refers to a financial statement that reports a company’s assets, liabilities, and shareholder equity at a specific point in time. Balance sheets provide the basis for computing rates of return for investors and evaluating a company’s capital structure. In short, the balance sheet is a financial statement that provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders. Balance sheets can be used with other important financial statements to conduct fundamental analysis or calculating financial ratios. Key Takeaways  A balance sheet is a financial statement that reports a company’s assets, liabilities, and shareholder equity.  The balance sheet is one of the three core financial statements that are used to evaluate a business.  It provides a snapshot of a company’s finances (what it owns and owes) as of the date of publication.  The balance sheet adheres to an equation that equates assets with the sum of liabilities and shareholder equity.  Fundamental analysts use balance sheets to calculate financial ratios.