Business Bits: Balance Sheet
By Jennifer Pontinen
HTF Contributor
The Balance Sheet reflects all management decisions since the company’s inception. So, when you look at a balance sheet dated 12/31/xx, it is only a snapshot of what the company looked like on that day. The simple equation to remember to ensure your balance sheet balances is Assets = Liabilities + Equity. Assets are things the company owns: cash, inventory, vehicles, buildings, etc. Assets can be financed in one of two ways – by company cash (Equity) or by debt (Liabilities). Liabilities are what the company owes and can include Accounts Payable, Lines of Credit, Vehicle Loans, Mortgages, etc.
Jennifer Pontinen is a Business Consultant with the UMD Small Business Development Center, at Mesabi Range College in Virginia, MN. Contact her at jpontinen@umdced.com.
