Series 65: 1.4.1.2. The Balance Sheet

Taken from our Series 65 Online Guide

1.4.1.2. The Balance Sheet

The balance sheet is a document that summarizes a company’s assets, liabilities, and shareholders’ equity. On the balance sheet, assets are what the company owns, liabilities are what the company owes, and shareholders’ equity is what’s left over, the company’s net worth. The balance sheet is different from the income statement in that it shows financial information at a particular point in time rather than over a period of time.

The balance sheet is represented by the following equation:

assets = liabilities + shareholders’ equity

This equation demonstrates that at all times a company’s assets must be equivalent in value to the combined value of the company’s liabilities and shareholders’ equity.

Balance Statement for Northwest Coffees, Inc. (in millions)

Assets

Cash and Cash Equivalents

7.0

Accounts Receivable

10.0

Inventory

3.7

Property, Plant and Equipment

15.1

Goodwill

1.2

Patents

3.2

Total Assets

40.2

Liabilities

Accounts Payable

5.0

Other Current Liabilities

2.5

Long-term Debt

12.4

Total Liabilities

19.9

Since you're reading about Series 65: 1.4.1.2. The Balance Sheet, you might also be interested in:

Solomon Exam Prep Study Materials for the Series 65
Please Enable Javascript
to view this content!