The balance sheet shows what a business owns, the asssets, what it owes, the liabilities, and its net worth at a specific point in time. The three parts of a balance sheet are assets, liabilities and equity. It has two sections that must balance, hence the name balance sheet. The balance sheet, together with the income and cash flow, is the main report for any business. In fact, the balance sheet is the core component of other financial statements as all others either feed into or are derived from it.