A Guide to Understanding Balance Sheets
- Price: £3.60
- Published: August 2016
- Type: Business Information Factsheet
- Format: PDF
The financial position of any business can be determined from three key financial statements: the balance sheet, the profit and loss account, and the cash flow statement.
A balance sheet is a financial 'snapshot' that summarises the value of a business (the assets of the business less its liabilities) at a specific point in time. All limited companies have to prepare a balance sheet as part of the annual accounts they submit to Companies House, but a balance sheet can be prepared at any time.
This factsheet explains the main features of a balance sheet, what kind of information it should contain and provides definitions of the key terms that are used on a balance sheet.