balance sheet

Meaning

A balance sheet is a financial statement that reports a company's assets, liabilities, and shareholder equity at a specific point in time. It provides a snapshot of what a business owns and owes, as well as the amount invested by shareholders. It is called a 'balance' sheet because assets must equal liabilities plus equity.

Examples

• The accountants are busy preparing the final balance sheet for the end of the quarter.

  The accountants are busy preparing the final balance sheet for the end of the quarter.

• Investors always look at a company's balance sheet to check its financial health before buying shares.

  Investors always look at a company's balance sheet to check its financial health before buying shares.

• According to our latest balance sheet, our total assets have grown by fifteen percent.

  According to our latest balance sheet, our total assets have grown by fifteen percent.

• We need to list the new office equipment as an asset on the balance sheet.

  We need to list the new office equipment as an asset on the balance sheet.

• The bank requested a copy of our current balance sheet before approving the business loan.

  The bank requested a copy of our current balance sheet before approving the business loan.

Common Mistakes

• ✗ I need to check the balance paper to see our profits from last month.

  ✓ I need to check the income statement to see our profits, or the balance sheet to see our assets.

  'Balance sheet' is the correct financial term. Furthermore, a balance sheet shows assets and liabilities, whereas profits are tracked on an income statement.

• ✗ Our balance sheet is not balancing.

  ✓ Our balance sheet doesn't balance.

  In business English, we use the active verb form 'doesn't balance' rather than the continuous form 'is not balancing' when assets do not match liabilities and equity.

Related Expressions

Practice

• The bank needs to see our ___ to make sure we have enough assets to secure the loan.

  💡 The financial statement showing assets, liabilities, and equity.

  Show answer

  balance sheet

• According to the latest ___, our company's liabilities have actually decreased.

  💡 A financial snapshot of what a company owns and owes.

  Show answer

  balance sheet