According to the dictionary, the definition of a balance sheet is "a statement of the assets, liabilities, and capital of your business at a particular point in time, detailing the balance of income and expenditure over the preceding period." Your balance sheet is a temporary snapshot that shows the current financial state of your company. It summarizes what you own (your assets), what you owe (your liabilities), and the money you've invested into your business plus profits (your equity).
So, the formula that every balance sheet always follows is: Assets = Liabilities + Equity
By downloading our Balance Sheet Template, you'll receive a balance sheet sample with built-in formulas, which you can edit directly to make your own. To learn more about what a balance sheet is and how to read it, check out our article on the LivePlan blog: What Is a Balance Sheet, and How Do You Read It?
The standard balance sheet format lists the sum of your assets (current and long-term) at the top of your document, followed by the sum of your liabilities (current and long-term), and the sum of your equity (capital, earnings, and retained earnings). Finally, your liabilities and equity are combined at the bottom of the document.
Depending on your business and industry, your balance sheet may include additional sub-items within your assets, liabilities, and equity.
In a balance sheet, your assets must always equal the sum of your liabilities and equity, so that it "balances out."
Your balance sheet is usually reported at the same time as your income statement (profit and loss) and cash flow statement. Together, those documents make up the key elements of your company's financial plan.
If you need more help creating your balance sheet, take a look at LivePlan. LivePlan is a simple business planning and financial forecasting tool that makes business numbers simple.
With LivePlan, you can easily create complete, and guaranteed accurate financials without any prior business knowledge. LivePlan walks you step-by-step through the process—no formulas for you to mess with or accounting knowledge required. Plus, you'll get our world-class phone and email support to help you along the way—something you won't have access to when you use this free template.
Using spreadsheets to manage your financials is painful—it often requires building complex pivot tables or toggling between multiple documents. But with LivePlan, all the calculations are done for you using built-in formulas.
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Over 500,000 businesses have used LivePlan to create accurate financial plans.
Most people are intimidated by the financials, but LivePlan made planning simple, saved me so much time, and just knowing that the calculations are correct makes this tool worth every penny!"
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Noelle Notals LLC
LivePlan saved me a lot of time because the software does so much of the work for you. All you have to do is answer questions and plug in numbers."
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