Balance Sheet

A balance sheet is a financial statement that shows what a company owns, what it owes, and what is left for the owners at one moment in time. Those three parts are assets, liabilities, and owner’s or shareholder’s equity. The two sides must be equal: assets equal liabilities plus equity.

Unlike the income statement, which covers a period, the balance sheet is a snapshot. Investors and lenders use it to judge liquidity and the ability to pay debts.