What is a Balance Sheet?
A balance sheet is a financial statement that shows what a business owns (assets), what it owes (liabilities), and what’s left over for the owner (equity) at a specific point in time. It helps track financial health and stability.

Why Does It Matter?

• It helps business owners understand if they have more assets than debts.

• Banks and investors use it to decide if a business is financially strong.

• Even for personal finances, knowing what you own vs. owe helps in making better money decisions.

Simple Example:
Let’s say you own a small bakery.

• Your assets: cash in the bank, baking equipment, and inventory.

• Your liabilities: a loan you took to buy the equipment.

• Your equity: whatever remains after subtracting liabilities from assets.

Assets = Liabilities + Shareholders’ Equity

Quick Action Step:
Make a simple personal balance sheet today:
1️⃣ List everything you own (assets: cash, savings, investments).
2️⃣ List everything you owe (liabilities: loans, credit card balances).
3️⃣ Subtract liabilities from assets to find your net worth.

Are you in a strong financial position, or do you need to make adjustments?

"Know what you own, and know why you own it." – Peter Lynch