From the course: A Guide to Understanding Financial Statements
Join today to access over 24,900 courses taught by industry experts.
What is a balance sheet?
From the course: A Guide to Understanding Financial Statements
What is a balance sheet?
- [Instructor] And now we're ready to begin with our second financial statement, the balance sheet. To me, this financial statement is the most valuable of all three of the financial statements that we'll be covering in this course. This is what a balance sheet looks like. It's separated by your assets, which represent the amounts that the business either owns or substantially controls in the form of economic value, your liabilities, which represents the amounts that the business owes to the creditors of the business, and finally, our owners equity. Owners equity represents the amounts that the business owes, but this time to the owners of the business. So these can represent amounts that the owners put directly into the business, or alternatively, it can be the prior earnings not yet paid out to the owners. To me, a reason for why the balance sheet is so valuable is the fact that it ultimately tells you the most amount of information. As we'll soon see, your retained earnings account…
Practice while you learn with exercise files
Download the files the instructor uses to teach the course. Follow along and learn by watching, listening and practicing.
Download courses and learn on the go
Watch courses on your mobile device without an internet connection. Download courses using your iOS or Android LinkedIn Learning app.