A balance sheet shows business assets (what is owned) and liabilities (what is owed) on a particular date. Use our template to create a balance sheet and understand your business's financial health.
The balance sheet shows a business's financial health at a given time. It lists all the business's assets and liabilities. Net assets at that time are determined after knowing that.
It's possible to convert current assets into cash within one year or less. This includes cash, petty cash, inventory, and prepaid expenses.
Fixed assets are long-term assets a business uses and own in its operations. It can include equipment and tools, furniture and renovations, leasehold, property and land, and vehicles.
Total assets are calculated by combining current and fixed assets.
Current liabilities, also known as short-term liabilities, must be paid within a year. This includes accounts payable, credit cards payable, interest payable, accrued wages, and income taxes.
Long-term liabilities are due after a year or longer. This includes loans.
Total liabilities are calculated by combining short and long-term liabilities.
Net assets are calculated by subtracting total liabilities from total assets.
Having the balance sheet set up is important for a business. Still, there are a lot of moving parts that need to be done in getting a small business up and running.