What is a company’s balance sheet

There are a variety of common financial statements that a company can use – one of the most common is the balance sheet.

The balance sheet shows the financial position of a company at a particular point in time and is split into three broad categories

Assets

– These are the resources owned by the business – this could be in the guise of raw materials, capital equipment and money owed by debtors

Capital

– A source of funds, often the money provided through sale of shares or retained profit from previous years trading.

Liabilities

– The debts of the business – money owed to suppliers etc. This might also include loans that need repaying.

In a balance sheet the value of assets must equal the value of liabilities and Capital

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