Business Valuation Glossary

Balance Sheet


A key financial statement of the business. It shows the relationship between the business assets, liabilities, and owner’s equity.

What It Means

The Balance Sheet must balance to establish the equality:

assets = liabilities + owner’s equity

It shows at any given time how a company’s possessions are offset against its obligations. The difference is what the business owners claim, which is their net worth or owner’s equity.