Definition:

A balance sheet is a financial statement that tracks a business’ assets, liabilities and shareholder equity. Assets always balance (i.e. equal) liabilities plus equity.

Example:

Why it matters:

The Balance Sheet is one of the three main financial statements used to track a company’s performance. While the Income statement and cash flow statement measure performance over a certain period of time (e.g. a month, quarter, or year), the balance sheet records the cumulative position since the company started up to a stated point in time (e.g. the last day of the month, or financial year).