A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific time. It is one of the key financial statements investors, creditors, and other stakeholders use to evaluate a company's financial health. In this blog post, we will discuss the basics of a balance sheet, including the different components and how to interpret them.Assets are resources that a company owns and that have economic value.
They are listed on the balance sheet in order of liquidity, meaning the ease with which they can be converted into cash. The most liquid assets are listed first, followed by less liquid ones.Current assets are expected to be converted into cash within a year. They include cash and cash equivalents, short-term investments, accounts receivable, inventory, and prepaid expenses.Non-current assets are not expected to be converted into cash within a year. They include long-term investments, property, plant, equipment, intangible assets, and goodwill.
