How does balance sheet statement work

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Accepted Answer

Balance sheet statement shows a company's assets, liabilities, and shareholders' equity at a specific point in time.

Balance sheet follows the formula: Assets = Liabilities + Shareholders' Equity
Assets are what the company owns, liabilities are what it owes, and shareholders' equity is the difference between the two.
It provides a snapshot of the company's financial position and helps investors and analysts assess its financial health.
Examples of assets include cash, inventory, and property. Liabilities can include loans, accounts payable, and bonds. Shareholders' equity includes retained earnings and stock.
Balance sheet is one of the three main financial statements along with the income statement and cash flow statement.

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