Difference between revisions of "Balance sheet"
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Revision as of 17:34, September 13, 2007
A Balance Sheet is a fundamental accounting statement that provides a 'snapshot' of an entity's assets, liabilities and equity at a point in time.
It is called such as the total assets are equal to the total liablities plus equity.
Any meaningful analysis of a company's finances must include a review of the balance sheet, income statement and statement of changes in financial position.
However, certain meaningful ratios can be gleaned from the balance sheet alone, such as Debt/Equity ratio, Working Capital ratio.
Fundamental to proper balance sheet preparation is a rigorous "cut-off". That is, if a balance sheet has a date of November 30, it must not include cash received on December 1.