Balance Sheet

A balance sheet is a core financial statement that provides a snapshot of a company’s financial position at a specific point in time. It shows what the business owns (assets), what it owes (liabilities), and the net value belonging to shareholders (equity).

The balance sheet follows the fundamental accounting equation:

Equity = Assets - Liabilities

Example:

If a company owns £500,000 in assets and owes £300,000 in liabilities, its equity (net worth) is £200,000.

Used in:

Financial analysis, lending decisions, investor reporting, and business valuation.