A powerful tool for any business is their balance sheet. This document provides a snapshot of the company’s financial standing at a specific point in its operation. At TeamBased Tax Services examine key components for taxes and bookkeeping services, and how the business utilized information for sustainable growth.

A balance sheet is like a financial report card for a business, revealing its assets, liabilities, and Equity. Assets represent what the company owns, liabilities are its obligations, and Equity is the residual interest of the owners.

The balance sheet follows the fundamental accounting equation: Assets = Liabilities + Equity. This equation ensures that a company's resources are financed by either debt or Equity.

The Key Components:

Assets:

• Current Assets (e.g., cash, accounts receivable, inventory)
• Fixed Assets (e.g., property, equipment, intangible assets)

Liabilities:

• Current Liabilities (e.g., accounts payable, short-term debt)
• Long-term Liabilities (e.g., mortgages, long-term debt)

Equity:

• Common Stock
• Retained Earnings