What is a balance sheet?
A balance sheet is one of the three primary financial statements used in accounting, along with the income statement and cash flow statement. It provides a summary of a company’s assets, liabilities, and shareholders’ equity, also known as net worth or book value.
The balance sheet follows the basic accounting equation: Assets = Liabilities + Shareholders’ Equity. This means that the total assets of a company must equal the sum of its liabilities and shareholders’ equity.
