{"id":10352,"date":"2023-04-12T13:39:12","date_gmt":"2023-04-12T08:09:12","guid":{"rendered":"https:\/\/www.tickertape.in\/glossary\/?p=10352"},"modified":"2023-04-18T13:20:14","modified_gmt":"2023-04-18T07:50:14","slug":"balance-sheet","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/","title":{"rendered":"Balance Sheet &#8211; Definition, Purpose, Format, Example, and More"},"content":{"rendered":"\n<p>The balance sheet is an important financial statement which can help investors and all stakeholders understand the true worth of a company. A balance sheet portrays the relationship between a company\u2019s assets, liabilities and equity at any given time.<\/p>\n\n\n\n<p>Read on to discover balance sheet meaning, how to analyse a balance sheet, how to read a balance sheet and much more.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_22 counter-hierarchy counter-numeric\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">You will Learn About: <\/p>\n<span class=\"ez-toc-title-toggle\"><a class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" style=\"display: none;\"><i class=\"ez-toc-glyphicon ez-toc-icon-toggle\"><\/i><\/a><\/span><\/div>\n<nav><ul class=\"ez-toc-list ez-toc-list-level-1\"><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#What-is-a-balance-sheet\" title=\"What is a balance sheet?\">What is a balance sheet?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Return-on-equity-Highlights\" title=\"Return on equity: Highlights\">Return on equity: Highlights<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#What-is-the-purpose-of-a-balance-sheet\" title=\"What is the purpose of a balance sheet?\">What is the purpose of a balance sheet?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#What-items-are-there-on-a-balance-sheet\" title=\"What items are there on a balance sheet?\">What items are there on a balance sheet?<\/a><ul class=\"ez-toc-list-level-3\"><li class=\"ez-toc-heading-level-3\"><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Assets\" title=\"Assets\">Assets<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-3\"><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Liabilities\" title=\"Liabilities\">Liabilities<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-3\"><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Shareholders-equity\" title=\"Shareholder&#8217;s equity\">Shareholder&#8217;s equity<\/a><\/li><\/ul><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Balance-sheet-format\" title=\"Balance sheet format\">Balance sheet format<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Balancing-a-balance-sheet\" title=\"Balancing a balance sheet\">Balancing a balance sheet<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Balance-sheet-example\" title=\"Balance sheet example\">Balance sheet example<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Does-a-balance-sheet-always-balance\" title=\"Does a balance sheet always balance?\">Does a balance sheet always balance?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#How-to-analyse-a-balance-sheet\" title=\"How to analyse a balance sheet?\">How to analyse a balance sheet?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Who-prepares-a-balance-sheet\" title=\"Who prepares a balance sheet?\">Who prepares a balance sheet?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#How-often-is-a-balance-sheet-prepared\" title=\"How often is a balance sheet prepared?\">How often is a balance sheet prepared?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Importance-of-the-balance-sheet\" title=\"Importance of the balance sheet\">Importance of the balance sheet<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.tickertape.in\/glossary\/balance-sheet\/#FAQs\" title=\"FAQs\">FAQs<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What-is-a-balance-sheet\"><\/span><strong>What is a balance sheet?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"317\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/balance-sheet-definition-1024x317.jpeg\" alt=\"\" class=\"wp-image-10398\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/balance-sheet-definition-1024x317.jpeg 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/balance-sheet-definition-300x93.jpeg 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/balance-sheet-definition-1536x475.jpeg 1536w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/balance-sheet-definition-1024x317@2x.jpeg 2048w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/balance-sheet-definition-300x93@2x.jpeg 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<p>A balance sheet represents a company&#8217;s assets, liabilities and shareholder equity for a defined time period. In other words, a balance sheet depicts a business&#8217;s worth at a specified time and helps understand what a company owns and owes.&nbsp;<\/p>\n\n\n\n<p>Balance sheet analysis is critical for potential investors and stakeholders to make financial decisions. When combined with the income and cash flow statements, a balance sheet portrays the exact financial conditions of the business and can help determine the growth and profitability of a company.&nbsp;<\/p>\n\n\n\n<p>Balance sheets are prepared as per accounting standards and can be generated annually or quarterly.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-uagb-advanced-heading uagb-block-37fca231\"><h2 class=\"uagb-heading-text\"><span class=\"ez-toc-section\" id=\"Return-on-equity-Highlights\"><\/span>Return on equity: Highlights<span class=\"ez-toc-section-end\"><\/span><\/h2><\/div>\n\n\n\n<ul>\n<li>A balance sheet depicts the assets, liabilities and shareholder equity associated with a business at a given time.&nbsp;<\/li>\n\n\n\n<li>The balance sheet should always balance out. In other words, assets must always be equal to the sum of shareholder equity and liabilities.<\/li>\n\n\n\n<li>Ratio analysis helps in conducting an in-depth analysis of the balance sheet.<\/li>\n\n\n\n<li>A balance sheet is critical in analysing the company&#8217;s financial status, liquidity and growth.<\/li>\n<\/ul>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"What-is-the-purpose-of-a-balance-sheet\"><\/span><strong>What is the purpose of a <\/strong><strong>balance sheet<\/strong><strong>?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let us comprehend why a balance sheet is prepared:<\/p>\n\n\n\n<ul>\n<li>To evaluate asset value and determine how assets are contributing to revenue and profits<\/li>\n\n\n\n<li>To assess liquidity&nbsp;<\/li>\n\n\n\n<li>To compute financial and other important ratios&nbsp;<\/li>\n\n\n\n<li>To depict the financial position of a company<\/li>\n\n\n\n<li>To understand the company&#8217;s debt and equity structure&nbsp;<\/li>\n\n\n\n<li>To determine future growth<\/li>\n\n\n\n<li>To aid comparison with peers<\/li>\n<\/ul>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"What-items-are-there-on-a-balance-sheet\"><\/span><strong>What items are there on a balance sheet?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"422\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Components-of-balance-sheet-1024x422.jpeg\" alt=\"\" class=\"wp-image-10399\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Components-of-balance-sheet-1024x422.jpeg 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Components-of-balance-sheet-300x124.jpeg 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Components-of-balance-sheet-1536x632.jpeg 1536w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Components-of-balance-sheet-1024x422@2x.jpeg 2048w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Components-of-balance-sheet-300x124@2x.jpeg 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<p>A balance sheet consists of the following items:<\/p>\n\n\n\n<h3><span class=\"ez-toc-section\" id=\"Assets\"><\/span><strong>Assets<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The asset section of a balance sheet determines a company&#8217;s acquired assets. The assets are subdivided into two categories:<\/p>\n\n\n\n<ol>\n<li><strong>Current Assets &#8211; <\/strong>These assets can be liquidated\/converted into cash readily, such as inventory, marketable securities, cash and cash equivalents, accounts receivables, and prepaid expenses.&nbsp;<\/li>\n\n\n\n<li><strong>Non-current Assets <\/strong>&#8211; Non-current assets cannot be converted into cash immediately and comprise long-term securities, fixed assets, and intangible assets.<\/li>\n<\/ol>\n\n\n\n<h3><span class=\"ez-toc-section\" id=\"Liabilities\"><\/span><strong>Liabilities<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The amount a business owes in debt constitutes the liabilities section. Liabilities are further subdivided as shown below:<\/p>\n\n\n\n<ol>\n<li><strong>Current liabilities &#8211; <\/strong>These include rent, taxes, payments toward short-term debts etc.&nbsp;&nbsp;<\/li>\n\n\n\n<li><strong>Non-current liabilities &#8211; <\/strong>The long-term dues associated with a company include long-term loans, deferred liabilities, deferred income taxes and more.&nbsp;<\/li>\n<\/ol>\n\n\n\n<h3><span class=\"ez-toc-section\" id=\"Shareholders-equity\"><\/span><strong>Shareholder&#8217;s equity<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Shareholder&#8217;s equity refers to \u2013<\/p>\n\n\n\n<ol>\n<li>Amount of money invested into a business by its shareholders<\/li>\n\n\n\n<li>Amount of funds generated by a business<\/li>\n\n\n\n<li>Any donated <a href=\"https:\/\/www.tickertape.in\/glossary\/what-is-capital-definition-of-capital-types-and-its-importance\/\">capital<\/a><\/li>\n<\/ol>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Balance-sheet-format\"><\/span><strong>Balance sheet format<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In India, there are two formats for preparing a balance sheet:&nbsp;<\/p>\n\n\n\n<ol>\n<li><strong>Horizontal Format<\/strong><\/li>\n<\/ol>\n\n\n\n<p>This involves placing figures under the categories of assets and liabilities.&nbsp;<\/p>\n\n\n\n<ol start=\"2\">\n<li><strong>Vertical Format<\/strong><\/li>\n<\/ol>\n\n\n\n<p>This classifies the balance sheet entries as sources of funds (liabilities) and application of funds (assets)<\/p>\n\n\n\n<p>The formats primarily differ in the presentation. The below format might be useful while understanding how to prepare a balance sheet.&nbsp;<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"933\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Balance-sheet-format-1-1024x933.jpeg\" alt=\"\" class=\"wp-image-10397\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Balance-sheet-format-1-1024x933.jpeg 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Balance-sheet-format-1-300x273.jpeg 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Balance-sheet-format-1-1536x1400.jpeg 1536w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Balance-sheet-format-1-1024x933@2x.jpeg 2048w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/Balance-sheet-format-1-300x273@2x.jpeg 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<h2><span class=\"ez-toc-section\" id=\"Balancing-a-balance-sheet\"><\/span><strong>Balancing a <\/strong><strong>balance sheet<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A balance sheet illustrates how a business finances its assets, i.e. via debt or equity. Individuals seeking an answer to &#8211; how to make a balance sheet must pay close attention to the below formula:<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong>Assets = Liabilities + Shareholder\u2019s equity<\/strong><\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Balance-sheet-example\"><\/span><strong>Balance sheet example<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Let us look at the balance sheet presented by Reliance Industries.&nbsp;<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/NUQu0n2K3S-0ewzWG62qLfUJL0zWa_lbg0Wfnom2L8psboL5ThLQinNh8AONVCThA6bWj_jwyr-HsVWcPZ0lQd3q8a9kxSYOtQ7SZZGxcL34wbHebODhDN-SxesHBQ02z84xlhCfn1G5vyNioPnqEA\" alt=\"\"\/><figcaption class=\"wp-element-caption\">Source: <a href=\"https:\/\/www.tickertape.in\/stocks\/reliance-industries-RELI?utm_source=glossary&amp;utm_medium=article\" target=\"_blank\" rel=\"noreferrer noopener\">RIL website<\/a><\/figcaption><\/figure><\/div>\n\n\n<h2><span class=\"ez-toc-section\" id=\"Does-a-balance-sheet-always-balance\"><\/span><strong>Does a balance sheet always balance?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A balance sheet must always balance.&nbsp;<\/p>\n\n\n\n<p>In other words, the total assets must equal the sum of liabilities and shareholder&#8217;s equity each time. The reason behind this is the principle of double entry used in accounting. Transactions are recorded across two accounts to ensure consistency in the entries.&nbsp;<\/p>\n\n\n\n<p>Let\u2019s assume you run a mid-size firm and sell your machinery for Rs. 10 lakh. Then, your assets would decrease by Rs. 10 lakh, but your cash\/cash equivalents increase by the same amount, i.e., Rs. 10 lakh.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"How-to-analyse-a-balance-sheet\"><\/span><strong>How to analyse a balance sheet<\/strong><strong>?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Balance sheet analysis helps prospective investors and stakeholders gain insight into the company&#8217;s financial condition. The most effective technique used to analyse a balance sheet is ratio analysis. Activity, solvency, valuation and liquidity ratios can be used to analyse a balance sheet.<\/p>\n\n\n\n<p>You can also study separately how the company is utilising its debt or how the cash flow is being managed to gauge a company\u2019s actual standing.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Who-prepares-a-balance-sheet\"><\/span><strong>Who prepares a balance sheet?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"514\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/who-prepares-a-balance-sheet-1024x514.jpeg\" alt=\"\" class=\"wp-image-10400\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/who-prepares-a-balance-sheet-1024x514.jpeg 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/who-prepares-a-balance-sheet-300x150.jpeg 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/who-prepares-a-balance-sheet-1536x770.jpeg 1536w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/who-prepares-a-balance-sheet-1024x514@2x.jpeg 2048w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/who-prepares-a-balance-sheet-300x150@2x.jpeg 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<p>There may be different parties involved in preparing a balance sheet based on the company&#8217;s size, as stated below \u2013<\/p>\n\n\n\n<ul>\n<li>In the case of small, privately-owned businesses, the bookkeeper or the owner might prepare the balance sheet.&nbsp;<\/li>\n\n\n\n<li>Mid-sized firms usually employ the services of CAs and external accountants to prepare their balance sheets.&nbsp;<\/li>\n\n\n\n<li>Public companies must obtain external audits from public accountants.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"How-often-is-a-balance-sheet-prepared\"><\/span><strong>How often is a <\/strong><strong>balance sheet<\/strong><strong> prepared?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Though a balance sheet statement can be prepared at any time, they are usually prepared at the end of an accounting year.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Importance-of-the-balance-sheet\"><\/span><strong>Importance of the <\/strong><strong>balance sheet<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Here is an overview of the importance of a balance sheet&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Financial status <\/strong>&#8211; The balance sheet gives an insight into the company&#8217;s financials. This helps investors, stakeholders and creditors get an extensive overview of a company&#8217;s liquidity and business accomplishments.<\/li>\n\n\n\n<li><strong>Growth status <\/strong>&#8211; The balance sheet helps determine a company&#8217;s growth over the years.<\/li>\n\n\n\n<li><strong>Business <a href=\"https:\/\/www.tickertape.in\/glossary\/loan-meaning-interest-rates-types-and-repayment\/\">loan<\/a> <\/strong>&#8211; To qualify for a business loan, it is essential to submit the balance sheet to a bank.<\/li>\n\n\n\n<li><strong>Future strategies <\/strong>&#8211; A balance sheet can help formulate future strategies for a business, such as future expenses and business expansion.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A balance sheet is a statement that represents the assets, liabilities and equity of a company. It helps investors, stakeholders, and creditors assess a company&#8217;s financial health. Effective balance sheet analysis can help investors and stakeholders analyse a company&#8217;s future growth potential to make more effective <a href=\"https:\/\/www.tickertape.in\/glossary\/investment-meaning-types-how-to-invest-and-savings-vs-investments\/\">investment<\/a> decisions.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-uagb-faq uagb-faq__outer-wrap uagb-block-cef3f8f3 uagb-faq-icon-row uagb-faq-layout-accordion uagb-faq-expand-first-true uagb-faq-inactive-other-true uagb-faq__wrap uagb-buttons-layout-wrap uagb-faq-equal-height\" data-faqtoggle=\"true\" role=\"tablist\">\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-e7e1a77e\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>What is a consolidated balance sheet?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">A consolidated balance sheet shows the financial standing of a parent company and its subsidiary. It consolidates the financials of the parent and subsidiary to present the combined balance sheet of the entire group.<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-8992dccd\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>What is the objective of a balance sheet?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">A balance sheet is essential for internal and external stakeholders to gauge a company&#8217;s financial health and standing.<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-f8489ab1\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>What information does a balance sheet include?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">A balance sheet includes information about the funding and utilisation of funds in the form of assets, liabilities and shareholder equity.<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The balance sheet is one of the three main financial statements used to determine a firm\u2019s financial health and stability. Read further to know more!<\/p>\n","protected":false},"author":90,"featured_media":10353,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":""},"categories":[1930,1],"tags":[1929],"jetpack_featured_media_url":"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1.png","uagb_featured_image_src":{"full":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1.png",2086,1086,false],"thumbnail":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-150x150.png",150,150,true],"medium":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-300x156.png",300,156,true],"medium_large":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1.png",768,400,false],"large":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-1024x533.png",770,401,true],"1536x1536":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-1536x800.png",1536,800,true],"2048x2048":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-2048x1066.png",2048,1066,true],"authorship-box-avatar":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-150x150.png",150,150,true],"authorship-box-related":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-70x70.png",70,70,true],"post-thumbnail":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-270x180.png",270,180,true],"contentberg-main":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-770x515.png",770,515,true],"contentberg-main-full":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-1170x508.png",1170,508,true],"contentberg-slider-stylish":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-900x515.png",900,515,true],"contentberg-slider-carousel":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-370x370.png",370,370,true],"contentberg-slider-grid-b":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-554x466.png",554,466,true],"contentberg-slider-grid-b-sm":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-306x466.png",306,466,true],"contentberg-slider-bold-sm":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-150x150.png",150,150,true],"contentberg-grid":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-370x245.png",370,245,true],"contentberg-list":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-260x200.png",260,200,true],"contentberg-list-b":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-370x305.png",370,305,true],"contentberg-thumb":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-87x67.png",87,67,true],"contentberg-thumb-alt":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/04\/08-1-1-150x150.png",150,150,true]},"uagb_author_info":{"display_name":"Anjali Chourasiya","author_link":""},"uagb_comment_info":0,"uagb_excerpt":"The balance sheet is one of the three main financial statements used to determine a firm\u2019s financial health and stability. Read further to know more!","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/10352"}],"collection":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/users\/90"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/comments?post=10352"}],"version-history":[{"count":8,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/10352\/revisions"}],"predecessor-version":[{"id":10453,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/10352\/revisions\/10453"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/media\/10353"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/media?parent=10352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/categories?post=10352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/tags?post=10352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}