A balance sheet is the financial statement showing a company's assets, liabilities, and stockholders' equity at a specific point in time. Unlike the P&L and cash flow statements that cover a period, the balance sheet is a snapshot, and the fundamental equation Assets = Liabilities + Equity always holds (hence "balance"). It is one of the three core financial statements (P&L, balance sheet, cash flow) that together provide a complete view of financial position. Balance sheets are more important at later-stage and public companies than at early-stage startups, where most items are minimal and cash is the only meaningful asset.
The standard balance sheet structure:
Assets (what the company owns):
Current Assets (convertible to ca...