How to Create a Balance Sheet

A balance sheet is a snapshot of your business’s financial health at one point in time. It lists all of your company’s assets and debts.

It also shows the total value of assets compared to the total value of liabilities and shareholders’ equity. This document is used to assess your company’s risk, measure liquidity and compare competitors.

You can use our template to create your own balance sheet. It comes with preset items to fill in for your business, and hovering over specific column items brings up tips and instructions for entering the correct information.

Like other financial documents, the balance sheet does have some blind spots. It only reflects the company’s situation as of the reporting date and doesn’t capture any cash flow or other activity that might be occurring during that period. Additionally, different accounting systems and ways of managing depreciation can change the figures that are posted to a balance sheet.

The most important components of a balance sheet are the assets and debts sections. Assets are the resources your business owns, including money, inventory and property. The assets section is categorized based on convertibility and physical existence, with current assets being those that can be converted to cash within a year, such as accounts receivable or inventory, while fixed assets are those that have a physical existence and cannot be easily converted to cash, such as buildings and equipment.

Liabilities are the amounts you owe to other parties, including vendors and lenders. The liabilities section is broken down into current and long-term liabilities, with current liabilities being those you expect to pay off within a year and long-term liabilities being those that are due more than a year from now. Finally, the shareholder’s equity section reports the value of shares owned by shareholders, which is a combination of initial investment and retained earnings. Bilanz

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