A summary of the financial position of a business or other organisation on a specified date, typically the end of the financial or calendar year, and which is used to calculate the net worth of the business. Each balance sheet follows a formula: Assets = Liabilities + Shareholders’ Equity. It is referred to as a ‘balance sheet’ because it is necessary for the two sides (assets & liabilities) to balance out: total assets must equal liabilities plus equity (how the assets are financed).

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