Balance Sheet
A financial statement showing a company's assets, liabilities, and shareholders' equity at a specific point in time.
What is Balance Sheet?
The balance sheet, formally known as the Statement of Financial Position, is one of the three core financial statements and presents a snapshot of what a company owns (assets), what it owes (liabilities), and the residual interest belonging to shareholders (equity) at a specific date. The fundamental accounting equation — Assets = Liabilities + Equity — must always hold true. Assets are listed in order of liquidity, from most liquid (cash) to least liquid (long-term assets), while liabilities are ordered by their due date. Investors use the balance sheet to assess a company's financial strength, leverage, and ability to meet its obligations.
Example
Apple's balance sheet as of September 2024 showed total assets of $364 billion, including $65 billion in cash and short-term investments, against total liabilities of $308 billion and shareholders' equity of approximately $56 billion — reflecting the company's strategy of returning cash to shareholders via buybacks.