What is a Balance Sheet?

The balance sheet is an obligatory element of every company's annual report. It includes information on a company's:

• Assets
• Liabilities
• Equity
• Net worth

These are tied to a particular time period. By referring to the balance sheet you can find out what is the real value of a company.

Avoid falling in the common mistake of referring to the balance sheet as the bottom-line. The latter is found in the income statement of the company and has no place in its balance sheet.

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