Balance Sheet | MBA in Pills | 4wMBA

The balance sheet is one of the main financial statements used in financial accounting. The purpose of the balance sheet is to report the way the resources to run the operations of the business were acquired. The Balance Sheet helps us to assess the risk of the business. By looking at it you will be able to answer to questions, such as: What is the leverage? Is the company liquid enough? Remember, leverage means the proportion between equity and debt, while liquidity is the capacity of the business to repay for its short-term obligations, to run the operations.

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Gennaro Cuofano, International MBA. Author of "The Enlightened Accountant," and "The Art of Mentorship."