What is a Balance Sheet?

Balance sheet (Definition)

A balance sheet is a document that gives you an idea of your company’s financial health, allowing you to assess where money is coming in from, and where it is going. It is issued monthly, quarterly, or annually, depending on the business requirements, and it records three things: assets, liabilities, and equity. These three features are listed on the left side of the balance sheet, while the dollar figures are listed on the right. The assets section includes anything that has monetary value, such as cash, cash equivalents, prepaid expenses, accounts receivable, real estate, inventories, investments, intangible assets, and other assets of value. Liabilities are accounts payable (such as rent, utilities), long-term debt (loans), and deferred taxes. Shareholders' equity refers to the assets that remain in your company's hands after all liabilities have been paid and may include stock, retained earnings, equity capital, among other things.