Balance Sheet

The balance sheet is one of the three fundamental statements used in corporate financial reporting, along with the income statement and the cash flow statement. It offers a detailed picture of what a company owns (assets) and what it owes (liabilities), as well as the amount invested by its owners (shareholder equity). The statement is presented with assets on one side and liabilities and equity on the other, which must always be equal.

Assets and liabilities are typically separated into current and non-current categories. Current assets are those expected to be converted to cash within one year, while current liabilities are those due within one year. The difference between current assets and current liabilities is known as working capital, a key indicator of short-term liquidity. Analysts, investors, and creditors frequently use the balance sheet to evaluate a company's capital structure and assess its financial risk.