Vareto Finance Glossary

Balance Sheet (BS)


A balance sheet is one of the three core financial statements of a company that reports its assets, liabilities, and shareholder equity. This information is used to evaluate the business since it gives a snapshot of the company's finances (what it owns and owes) as of the date of publication.


Any company's balance sheet adheres to balancing out with the assets being on one side and the liabilities plus shareholder equity on the other. Thus resulting in the accounting equation: Assets = Liabilities+Shareholders’ Equity.

Why it matters

The balance sheet provides a snapshot in time as to the financial position of the company. It helps readers understand the cash a company has on hand and the other assets it owns (both fixed and non-fixed); it also displays what a company owes to others (e.g., vendors, investors, employees).