What is a balance sheet? The balance sheet is one of the three fundamental financial statements used in a company’s accounting. The other two statements are the income statement and the cash flow statement which are all regularly used in fundamental analysis.
This particular statement details the company’s assets and how they are financed. A company’s assets can either be financed through debt or equity.
The balance sheet is split into two main sections. The first section details the assets – current assets and non-current assets. The second section details the liabilities – current liabilities and non-current liabilities as well as shareholders’ equity. The sum of liabilities and equity should equal the sum of assets.
The difference between the current and non-current is based on liquidity, or how quickly the assets can be turned into accessible cash, or how fast the liabilities need to be covered (paid). Twelve months is often referred to as short term and used as a guide for being current or non-current. For example, cash or short term investments can be accessed quickly, whereas property could take a long while to sell and therefore access the cash. In the same respect, short-term debt will often need to be paid within the next 12 months, whereas long-term debt may not need to be settled for 5-10 years.
Further Details & Company Data
For more detailed information, including training, templates and company figures, visit one of the below sites or software providers:
|Site / Software||Description||Link|
|CFI – Corporate Finance Institute||Training, detailed explanations & templates||CFI Website|
|Finbox||Detailed company financials & models||Finbox Website|
|TradingView||Basic company financials & charts||TradingView Financials|
|SharePad||Company financials, news, filters and portfolio management||SharePad Signup Page|
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