A balance sheet is a fundamental financial statement that provides a snapshot of a company's financial health at a specific time. It details what a company owns (assets), what it owes (liabilities), and the shareholders' investment (equity).
Balance sheets are critical because they provide a clear view of financial health, help assess a company's liquidity and solvency, and assist in making strategic financial decisions.
To ensure your balance sheet 'balances', use the formula: Assets = Liabilities + Equity, which is essential for an accurate reflection of your financial position.
Understanding how to make and read a balance sheet is crucial for any business owner, even if you decide to hire an accountant.
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