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. The balance sheet is one of the three core financial statements that are used to evaluate a business.

What is an example of a basic balance sheet?

This is an example of a basic balance sheet and what’s included. Download Balance Sheet Example In this example, the imagined company had its total liabilities increase over the time period between the two balance sheets and consequently the total assets decreased.

What is the composition of a balance sheet?

The composition of the balance sheet is composed of three pieces, which are assets, liabilities, and shareholders’ equity. The balance sheet is a financial statement that provides a snapshot of a company’s assets, liabilities, and shareholders’ equity at a specific point in time.