From the course: Build Your Financial Literacy
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Balance sheet
From the course: Build Your Financial Literacy
Balance sheet
- A balance sheet is another one of the three important financial statements you use for reporting your company's financial performance. A balance sheet reports your company's assets, liabilities, and shareholders' equity at a specific point in time. It's a snapshot of what your company owns and owes as well as the amount invested by shareholders. The balance sheet adheres to this simple accounting formula: your liabilities, plus your shareholders' equity, equals your assets. Your company has to pay for all the things that it owns, its assets, by either borrowing money, taking on liabilities, or taking it from investors, issuing shareholders' equity. The balance sheet is an important piece of information when determining your company's viability. However, it does have some drawbacks, which is why it needs to be accompanied by an income statement and a cashflow statement. Since it only highlights your performance…
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