Balance Sheet

Definition: One of the three main financial statements. It shows what the company owns and owes at a point in time.

Example: A simple balance sheet would show that as of the last day of the previous month, the company had $100 in cash, $60 in accounts payable to vendors, and $40 in owners’ equity.

Why It’s Important: Many metrics of the health of a company can be calculated from the balance sheet.

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