A balance sheet (BS) is a financial statement that shows what a company owns (assets), what it owes (liabilities), and what belongs to shareholders (equity) at a specific point in time. The fundamental equation — Assets = Liabilities + Equity — always holds, giving a snapshot of the company's financial structure. Key Components: • Current Assets: Cash, receivables, inventory — items convertible to cash within one year • Non-current Assets: Property, goodwill, long-term investments — assets held long term • Current Liabilities: Payables, short-term debt — obligations due within one year • Non-current Liabilities: Long-term debt, bonds — obligations due beyond one year • Shareholders' Equity: Capital stock, retained earnings — the portion belonging to shareholders Using It for Investment Decisions: A higher equity ratio generally signals stronger financial stability, while a high debt ratio increases risk during rising interest rate environments. Comparing these metrics with industry peers helps assess relative financial health.