Balance Sheet

A balance sheet has three sections: assets (cash, inventory, property, equipment - everything the company owns or is owed), liabilities (loans, supplier dues, everything the company owes to others), and shareholders' equity (what's left for owners after subtracting liabilities from assets). The defining rule is that Assets always equal Liabilities plus Equity - a company's resources are always exactly matched by how those resources were funded, either through debt or owners' capital. Unlike the income statement, which covers a period, a balance sheet is a snapshot 'as of' a single date - typically the end of a financial quarter or year - so it shows financial position, not performance over time.