The Balance Sheet

The balance sheet is a measure of a company's financial position at a specific point in time. The balance sheet's performance is broken up into three major categories: assets, liabilities, and shareholders' equity, where the company's total value of assets must always equal the sum of its liabilities or shareholders' equity. Examples of assets are cash, inventory, accounts receivable, and property. Assets are separated into two categories: current assets and noncurrent assets. A liability is any debt or financial obligation of a company. There are current liabilities and non-current liabilities. The chapter provides some examples of current liabilities: accounts payable, and accrued liabilities. It lists the historical values for liabilities. The company has three non-current liability line items, “Long-term lease liabilities,” “Long-term debt,” and “Other long-term liabilities.” The shareholders' equity section of the balance sheet can be thought of in two major segments: equity, and earnings.