Q&A of the Week July 13, 2022

Question

What is a balance sheet?

Answer

A balance sheet is a financial statement that shows a business's assets, liabilities, and shareholder's equity for any given date. It helps gauge cash flow by showing income and debts.

You can check your balance sheet to make sure the numbers are correct. The assets should equal total liabilities plus shareholder's equity.

A balance sheet is one of the three core financial statements used to evaluate a business's performance. The other two core financial statements are an income statement and a cash flow statement.