Balance Sheet

What Is A Balance Sheet?

The balance sheet is one of the three most important documents—the other two are income statement and the statement of cash flow—that companies produce that enable their investors to examine and assess their financial health. Publicly traded companies are required to produce and publish these documents regularly, usually once per quarter, to shareholders as well as to tax and regulatory authorities.

The balance sheet shows the financial position—essentially, the net worth—of a business at a given point in time. It also displays the listing assets, liabilities and stockholder's equity. The company's assets must equal the sum of its liabilities and stockholders' equity, as follows: Assets = liabilities + equity.

Normally, the company's assets are listed in the left-hand column of the balance sheet, while liabilities and equity are listed on the right. Both sides must balance out, hence the name.

Assets

Assets include all of the cash and property at the company's disposal to pay all of its bills. The asset side is usually divided into three parts:

Current assets include cash on hand, marketable securities that can be easily sold, inventory and supplies.
Fixed (or non-current) assets include items like the company's property, such as land, buildings and equipment.
Intangible assets include items like intellectual property, copyrights and patents, the estimated value of the company's brand and trade names, and goodwill, which is the difference between what a company agrees to pay for another company and its fair market value.

Liabilities

Liabilities include all of the money the company owes at that point in time. Liabilities are divided between current and long-term liabilities, as follows:

Current liabilities include such things as wages and benefits owed to employees, taxes, and short-term debt, that are due in less than one year.
Long-term liabilities include debts payable longer than one year and long-term pension obligations.

Equity

Essentially, the company's equity is the difference between its assets and liabilities. It includes the value of the company's stock plus retained earnings, which are profits held by the company and not distributed to shareholders as dividends.

The balance sheet is a snapshot of the company's net worth at one moment in time. As a result, it's important to compare the most current one to previous ones, such as the previous quarter or the one a year earlier, to check the direction of the company's financial health. Balance sheets can also be used by financial analysts and stockholders to calculate important ratios, such as its debt-to-equity ratio, that show the company's financial well-being.

Summary

The balance sheet shows the financial position of a business at a given point in time, listing assets, liabilities and stockholder's equity, where assets equals the sum of liabilities and equity. Both sides must balance out, and publicly traded companies usually publish their balance sheets once per quarter.

Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, Friedberg Direct, FXCM or its affiliates takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of Friedberg Direct and FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the Friedberg Direct's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.**

Order Execution Only

Order Execution Only

Regulatory Documents:
IIROC Brochure: How Can I Get My Money Back, How IIROC Protects Investors, IIROC Complaints Brochure, CIPF Brochure, CIPF Coverage Policy, IIROC Order Execution Only Bulletin, Conflict Disclosure Statement, Covid-19 and Cyber Security - Tips for Investors

The relationship between Friedberg Direct and FXCM was formed with the purpose to allow Canadian residents access to FXCM's suite of products, while maintaining their accounts with a regulated Canadian firm. All accounts are opened by and held with Friedberg Direct, a division of Friedberg Mercantile Group Ltd., a member of the Investment Industry Regulatory Organization of Canada (IIROC). Friedberg customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at www.cipf.ca.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)