Series 79: 1.2.1. Balance Sheet

1.2.1. Balance Sheet

A balance sheet (also called the statement of financial position or statement of condition) provides detailed information about a company’s assets, liabilities, and shareholders’ equity at a specific point in time.

It is critical to understand that, unlike other kinds of financial statements, a balance sheet does not reveal how a business is performing over time. It simply shows a company’s financial condition as of a given date, and for this reason a balance sheet is often referred to as a “snapshot” of the company’s finances.

The following equation expresses the basic principle of the balance sheet:

assets = liabilities + shareholders’ equity

The two sides of the equat