Example of a Balance Sheet

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Example of a Balance Sheet

Below you can see an example of a balance sheet and the various components in it. The most important lesson to learn in viewing this example is that the basic balance sheet equation holds true:

Assets = Liabilities + Shareholders’ Equity

The following balance sheet is arranged vertically, starting with assets and then proceeding to detail liabilities and shareholders’ equity. Note that the balance sheet gives a snapshot of the assets, liabilities, and equity for a given day. In our case, that is December 31. Often a balance sheet shows information for two successive periods, as does the one below. By showing areas of growth, this gives the investor a good perspective on the company’s operations.

As you can see, total liabilities and shareholders’ equity equal total assets.