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 + EquityEverything 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