What is a balance sheet based on?

The balance sheet displays the company’s total assets and how the assets are financed, either through either debt or equity. It can also be referred to as a statement of net worth or a statement of financial position. The balance sheet is based on the fundamental equation: Assets = Liabilities + Equity. Image: CFI’s Financial Analysis Course

What is a balance sheet used for?

Balance sheets can be used with other important financial statements to conduct fundamental analysis or calculate financial ratios. A balance sheet is a financial statement that reports a company's assets, liabilities, and shareholder equity.

What are the contents of a balance sheet?

In the above example, the contents of the balance sheet pertain to the financial condition of the company on December 31, 2021. A balance sheet summarizes the assets, liabilities, and capital of a company. Assets refer to properties owned and controlled by the company. Liabilities are obligations to creditors, lenders, etc.