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Balance sheet

A snapshot of what a company owns (assets) and what it owes (liabilities) on one day. The difference is shareholders' equity: what would be left for the owners.

Simple example

A company owns $100 of cash, buildings and other assets, and owes $60 in loans and unpaid bills. Its shareholders' equity is $100 − $60 = $40.

Assets $100What it ownsLiabilities $60Equity $40What it owes + equity=AssetsLiabilities + shareholders' equity
Made-up numbers, for illustration only.

Related terms

Net debtBorrowings minus cash.GoodwillThe part of an acquisition price above the assets you can list.Working capitalCash tied up in stock and unpaid invoices, minus unpaid bills.