balance-sheet

Vocabulary Word

Definition

A 'balance sheet' is a snapshot of a company's financial health. It shows what the company owns (assets) and owes (liabilities), and the value that's left over for the owners (equity).

Examples in Different Contexts

In corporate finance, the 'balance sheet' is vital for assessing a company's net worth. A CFO might state, 'By analyzing our balance sheet, we can strategize on maximizing our return on assets.'

Practice Scenarios

Business

Scenario:

The company's financial health looks strong. The ratio between our assets and liabilities is favorable.

Response:

Agreed. The balance sheet shows a strong position with high-value assets and low liabilities.

Startup

Scenario:

Given the startup's current financial position, I recommend due diligence before investing.

Response:

Before we move ahead with the investment, we need a comprehensive balance sheet for the last three financial years.