Balance sheet

The balance sheet provides a snapshot of what the company owned and is owed on a particular day in the past: usually the last day of the financial year (or last day of the first half of the year). The balance sheet summarises the assets and the liabilities of the business. The difference between the assets and liabilities is net assets or equity.

In reports and accounts you will often see two balance sheets. The first is for the parent company (holding company). This company’s numerous wholly or partly owned subsidiaries will be represented on the parent company’s balance sheet but not in consolidated form, so this is of limited use for financial analysis. The attention of the investor should be directed at the second balance sheet ...

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