Developing a Balance Sheet
In This Chapter
Breaking down the balance sheet
Pulling together your balance sheet accounts
Choosing a format
Drawing conclusions from your balance sheet
Polishing electronically produced balance sheets
Periodically, you want to know where your business stands. Therefore, at the end of each accounting period, you take a snapshot of your business’s condition. This snapshot, which is called a balance sheet, gives you a picture of where your business stands — how much it has in assets, how much it owes in liabilities, and how much the owners have invested in the business at a particular point in time.
This chapter explains the key ingredients of a balance sheet and tells you how to pull them all together. You also find out how to use some analytical tools called ratios to see how well your business is doing.
What Is a Balance Sheet?
Basically, creating a balance sheet is like taking a picture of the financial aspects of your business.
The company ...