Investing term

What is Balance sheet?

The 'photo' statement — what the company owns, what it owes, and what's left for owners, on a single date.

The balance sheet is a snapshot of a company on a single date: what it owns (assets), what it owes (liabilities), and what's left over for owners (equity). The two sides always balance — assets equal liabilities plus equity. It's the "photo" of financial position, telling you how much debt the company carries and whether it can cover its near-term bills.

For example

A balance sheet showing $5M in assets and $4.5M in liabilities leaves just $0.5M of equity — a thin cushion if business turns down.

Balance sheet is taught hands-on in Stage 14 — Reading Financial Statements.

See the lesson →

Related terms

Accounts receivable (A/R)Money customers owe the company for goods or services already delivered but not yet paid.AccrualsAccounting entries that record revenue or expense before cash actually moves.Annual reportThe yearly disclosure that includes audited financials, MD&A, and footnotes — the primary source for serious investors.Capital expenditures (CapEx)Money spent on long-lived assets — buildings, equipment, software, improvements.
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