Glossary

The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. 📋

It shows the company's assets (what it owns), liabilities (what it owes), and shareholders' equity (the difference between assets and liabilities). The balance sheet follows the accounting equation: Assets = Liabilities + Shareholders' Equity.

For example, a company might have $1 million in assets, $500,000 in liabilities, and $500,000 in shareholders' equity, indicating a healthy financial position.

Fun fact: The balance sheet is sometimes referred to as the "statement of financial position" or the "statement of net worth". 🏛️ It's one of the three main financial statements used by investors, along with the income statement and the cash flow statement, to evaluate a company's financial health.