Finance and accounting
Balance sheet
What a company owns and owes at one point in time.
Facts checked against sources onWhat does Balance sheet mean?
The balance sheet lists a company's assets (what it owns), liabilities (what it owes) and equity (the owners' share) on a given date. It always balances: assets = liabilities + equity.
Where does it come up in case interview prep?
- A light balance sheet, and why profit is not cashLesson in Business basics for non-business learners
- How the three statements link: one company through all threeLesson in Reading a business through its numbers: the three statements, cash and value
- Working capital in days: receivables, inventory, payables and the cash conversion cycleLesson in Reading a business through its numbers: the three statements, cash and value
- EBITDA versus operating profit versus free cash flowLesson in Reading a business through its numbers: the three statements, cash and value
- Return on capital against its cost: ROIC and WACC in plain wordsLesson in Reading a business through its numbers: the three statements, cash and value
- Reading a real results release: Inditex, FY2025Lesson in Reading a business through its numbers: the three statements, cash and value
- How a bank works and makes moneyLesson in Retail and commercial banking
Related terms
- Income statement (P&L)Revenue, costs and profit over a period.
- Working capitalCash tied up in running the business day to day.
- ProfitThe money left over after costs. Revenue minus cost.
- RevenueMoney earned from sales, before costs.
- CostWhat it takes to make and sell the product in a period.
- Fixed costA cost that stays the same when volume changes, within a normal range.
- Variable costA cost that rises and falls with how much you make.
- Semi-variable costA cost with a fixed part and a part that moves with volume.
Learn it in context
See Balance sheet at work in a lesson from Business basics for non-business learners, with checks as you go.
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