FinTech Glossary

What is a Balance Sheet?

A Balance Sheet is a financial statement that shows a company’s assets, liabilities, and shareholders’ equity at a specific point in time.

It provides a snapshot of what the business owns, what it owes, and the net value attributable to its owners.

Business Context

The Balance Sheet is one of the core financial statements used by management, investors, lenders, and auditors to assess a company’s financial health. It helps businesses understand liquidity, leverage, working capital, and long-term solvency.

Finance teams rely on the Balance Sheet to support budgeting, compliance, capital planning, audit preparation, and internal decision-making. It also directly affects creditworthiness, funding access, and valuation.

1. Assets

Resources owned by the company. It includes cash, receivables, inventory, equipment, property, and investments. Divided into:

• Current Assets (short-term)
• Non-Current Assets (long-term)

2. Liabilities

Obligations the company must repay. It includes payables, loans, accrued expenses, lease liabilities, and other debts. Divided into:

• Current Liabilities
• Non-Current Liabilities

3. Shareholders’ Equity

The owners’ residual interest in the company after liabilities are deducted from assets. It includes share capital, retained earnings, reserves, and accumulated profits.