formal 2K

Balance sheet

UK //ˈbæl.əns ʃiːt// US //ˈbæləns ʃit// Pronunciation

Definition

A financial statement that summarizes a company's assets, liabilities, and equity at a specific point in time.

Listen to definition

In simple words: A document showing a company's financial position at a specific time.

Examples

• The accountant prepared the balance sheet for the annual meeting.
• Investors often review the balance sheet to assess a company's health.
• The balance sheet revealed significant liabilities that concerned the board.
• A balance sheet is crucial for understanding a company's financial stability.
• We need to update our balance sheet to reflect recent changes.

Usage notes

Used primarily in business and finance contexts to evaluate a company's assets and liabilities.

Grammar pattern

standalone noun phrase

Memory hint

Think of a 'scale' indicating if a business is balanced or not.

Collocations

• prepare a balance sheet
• analyze a balance sheet
• update a balance sheet

Synonyms

• financial statement
• asset statement
• liability summary

Common mistakes

• Confused with 'income statement' which reports on profitability.
• Using 'balance sheet' in casual conversations instead of formal business discussions.
• Mixing up the difference between balance sheets and financial reports.