Balance sheet

An accounting document which provides a snapshot of the financial picture of a business on a given day. One side of the balance sheet lists the assets, moving from most liquid (cash) to least liquid (plant and equipment or goodwill (www.practicallaw.com/A36218)). The other side of the balance sheet lists liabilities in order of immediacy. In a company’s balance sheet, the assets must equal the liabilities plus shareholders’ equity. The balance sheet, along with the profit and loss account (www.practicallaw.com/A36715), is an important tool for analysing the financial health of a company.

For further details, see Practice note, Balance sheet, profit and loss account and notes to the accounts (www.practicallaw.com/3-379-0743).

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