A balance sheet shows key information about the financial status of a company at a specific point in time. The balance sheet shows a company’s assets, liabilities, and shareholder’s equity. Unlike an income statement or statement of cash flows, the balance sheet does not show a range or period of time but rather the condition of the company at the exact time of writing.
The balance sheet reports the value of all assets the company currently has, the company’s liabilities, and the equity stake of all owners each divided into relevant categories. The balance sheet adheres to a basic formula:
Assets = Liabilities + Owners’ Equity