Ameriwest Business Consultants, Inc.
General Business Tips
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What is a
What does it show?
The purpose of a Balance Sheet (also knows as a Statement of Financial Position) is to summarize the Assets, Liabilities and Equity position (Ownership-Net Worth) of the company at a specific point in time. The Assets must equal Liabilities plus Equity (Net Worth)
Assets = Liabilities + Equity
The Balance Sheet can classify assets and liabilities as short term or long term.
It can indicate trends in these categories. Combined with the income Statement, you can do a ratio analysis that can indicate how well the company is being run, how strong it is and how it compares to similar operations.
Below is an excerpt from a typical Balance Sheet as shown on our Financial Analyzer software..
Most of the software we sell automatically calculates the Balance Sheet
Click to view a detailed description of our Financial Analyzer Software
Note: The tips we offer are only suggestions and are meant to bring your attention to something you might want to consider. It is always recommended that before you take any action based upon these tips, you consult your attorney, accountant or tax advisor to be certain they are best for your particular situation.
Coming Next: What is a Balance Sheet and what does it show?
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Mailing Address: Ameriwest, P.O. Box 26266, Colorado Springs, Co. 80936
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Copyright © 2007, All Rights Reserved. Last Revised February 12, 2007.
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