Balance Sheet - overview

A photograph of the company on one specific date (31 March for annual filings, end of each quarter otherwise). It answers: what does the company own, and who does the money belong to?

The fundamental identity

Assets = Liabilities + Equity

Everything on the left side (what the company owns) must equal what it owes plus what shareholders own. That's the rule of double-entry accounting. The two sides always balance.

A simplified balance sheet

ASSETS                                LIABILITIES + EQUITY
─────────────────────────────         ─────────────────────────────
Current assets                         Current liabilities
  Cash and bank             50           Trade payables          40
  Trade receivables         80           Short-term borrowings   20
  Inventory                 70           Other liabilities       15
  Other                     20         Non-current liabilities
                                          Long-term debt        100
Non-current assets                      Equity
  Property, plant, equipment 300         Share capital           50
  Intangibles & goodwill     50          Reserves & surplus     345
─────────────────────────────         ─────────────────────────────
TOTAL                       570        TOTAL                    570