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Balance Sheet

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Balance Sheet
A financial Statement that summarizes a company's assets, liabilities and shareholders' Equity at a specific point in time.
    
These three balance sheet segments give investors an idea as to what the company's assets and debts are and investment by share holders' in the company.
    
The balance sheet must have three parts: assets, liabilities and shareholders' Equity, i.e.
    
Assets = Liabilities + Shareholders' Equity
    
Each of the three segments of the balance sheet Will have many accounts within it that document the value of each. On the asset side of the balance sheet are accounts such as Cash, inventory and property; while on the liability side there are accounts such as accounts payable or Long-term Debt. The exact accounts on a balance sheet Will differ by company and by industry, as there is no one set template that accurately accommodates for the differences between different types of businesses.
    
It's called a balance sheet because the two sides balance out. This makes sense: a company has to pay for all the things it has (assets) by either borrowing money (liabilities) or getting it from shareholders (shareholders' Equity).
    
The balance sheet is one of the most important pieces of financial information issued by a company. It is a nutshell of what a company owns and owes at that point in time. The income Statement, on the other hand, shows how much revenue and profit a company has generated over a certain period. Neither Statement is better than the other - rather, the financial statements are built to be used together to present a complete picture of a company's finances
Posted by  PrĂ©vis AG
 
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