A financial statement that summarizes a company’s assets, liabilities and shareholders’ equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
The balance sheet must follow the following formula:
Assets = Liabilities + Shareholders’ Equity
This is an example of how a simplified Balance sheet would look, this gives an example of the above equation of how the liabilities added to the shareholders equity should equal the assets.
