what is a balance sheet

A balance sheet is a financial statement that summarizes an organizations or individuals assets, equity, and liabilities at a specific point in time. It is one of the three core financial statements used to evaluate a business, along with the income statement and cash flow statement. The balance sheet provides a snapshot of a companys financial condition and is often described as a "snapshot of a companys financial position". It is used to compute rates of return for investors and evaluate a companys capital structure. The balance sheet adheres to an equation that equates assets with liabilities and equity. The assets are listed on the left side of the balance sheet, while the liabilities and equity are listed on the right side. The balance sheet can be used with other important financial statements to conduct fundamental analysis or calculate financial ratios. A balance sheet is an important reference document for investors and stakeholders for assessing a companys financial status.