Explain what a balance sheet is? Why is it used?

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A balance sheet is a financial statement that provides a snapshot of a company's assets, liabilities, and shareholders' equity at a specific point in time.

A balance sheet is used to show what a company owns (assets), what it owes (liabilities), and the amount invested by shareholders (equity).
It helps investors, creditors, and analysts assess the financial health and stability of a company.
The balance sheet follows the accounting equation: Assets = Liabilities + Shareholders' Equity.
Example: If a company has $100,000 in assets, $60,000 in liabilities, and $40,000 in shareholders' equity, the balance sheet would reflect this.
It is an essential tool for financial analysis and decision-making.

Explain what a balance sheet is? Why is it used?

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