What does a balance sheet show?

The balance sheet provides a snapshot of the company’s financial health at a specific point in time. It helps with financial modeling, budgeting, and managing cash flow by informing stakeholders, owners, and leadership what the company owns (assets), what it owes (liabilities) and how much has been invested into the company (equity). The balance sheet is one of the three fundamental financial statements that every business needs.

The balance sheet is used internally and externally for different purposes. Internally, the company uses the balance sheet to understand whether the business is succeeding or struggling by analyzing the liquidity position of the company. Externally, the balance sheet is a tool for investors, stakeholders and regulators to evaluate the financial position of the company, determine how the business was financed, and determine if the company is a smart investment.

How to make a balance sheet

It’s easy to create this financial statement with our free balance sheet template. A business balance sheet template allows you to see what information you need to gather, fill in the blanks, and get the results you need. With our balance sheet Excel template, you can determine your debt-to-equity ratio and your asset-to-equity ratio. And if you just want to see what goes on a balance sheet, this template can help you with that too.

Download this template for additional instructions.

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