A balance sheet is a statement of a business's assets, liabilities, and owner's equity as of any given date. Typically, a balance sheet is prepared at the end of set periods (e.g., every quarter; annually). A balance sheet is comprised of two columns. The column on the left lists the assets of the company.
A balance sheet is a financial statement of a company that provides details about the assets, liabilities, and equity owned by the organization at a particular point in time. In simple words, it can be said that a balance sheet gives details about the total net worth of your business.
The financial details from the past are also mentioned in the balance sheet. So that it is easy for the reader of the balance sheet to make a comparison of the performance of the company in two consecutive years, this data can be used to track the performance of the company and to analyze what areas require improvement. In addition to this, this data can be used to build finances for the company.
You can also refer to your balance sheet to learn about how you can fulfill your financial obligations as well as find out the best methods to make the use of your credit to finance your business operations.
There are a total of three types of financial statements that are prepared by an organization to keep track of the financial health of the company. However, the balance sheet holds the most important position among all the other financial statements.