Understanding a balance sheet is important if you want to know how a business is doing financially. A balance sheet shows three main parts: assets, liabilities and equity. Assets are what the business owns, like cash or equipment. Liabilities are what the business owes, such as loans or unpaid bills. Equity shows the value left for the owner after paying all debts. The key formula is: Assets equal Liabilities plus Equity. Everything should balance. Look at how much money the company has and what it owes to see if it is in good shape. Reading balance sheets gets easier with practice. It is a helpful skill whether you are running a business or just want to understand one better.
To read more- https://www.agibookkeeping.com.au/how-to-read-and-understand-the-balance-sheet/
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