Today’s episode discusses what a balance sheet is, why it is important, and how it is made.
All financial analysis begins with a balance. Your bank accounts provide an excellent example. When you log into them or check a statement, what is the first numbers shown on them? It is the balance. Balances give us a point in time perspective. All financial reporting begins with a Balance.
And the Balance Sheet gives a number of balances, for assets–things we own–and liabilities–things we owe. Equity is the difference between the two.
Watch the next week episode at Introduction to the Income Statement
Watch all episodes in order at the Conversations with Kip Playlist.