What is a balance sheet?

A balance sheet is a financial statement that presents a company’s financial position at a specific point in time. It shows the company’s assets, such as properties, stocks, and requisitions, on one side of the balance sheet and its liabilities (debts and equity) on the other side of the balance sheet.

The assets and liabilities should always be balanced, meaning that the total amount of assets should equal the total amount of liabilities. The balance sheet provides insight into a company’s financial health and is often used to assess its ability to meet both short-term and long-term obligations.

The balance sheet is usually prepared at the end of a financial year, but can also be prepared at any other time to assess the company’s financial position.