Difference between revisions of "Balance sheet"
Jump to navigation
Jump to search
| Line 1: | Line 1: | ||
| − | A | + | 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 liabilities plus [[equity]]. | It is called such as the total [[assets]] are equal to the total liabilities plus [[equity]]. | ||
Revision as of 03:13, January 26, 2008
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 liabilities 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.