Reading a balance sheet might seem tricky at first, but it becomes easier once you understand the basics. A balance sheet is a financial document that shows what a business owns and what it owes at a certain point in time. It is divided into three parts: assets, liabilities, and equity. Assets are things the business owns, like cash or equipment. Liabilities are what the business owes, such as loans. Equity shows the owner's share in the business after all debts are paid. When you compare these sections, you can get a clear picture of a company’s financial health. Learning to read a balance sheet can help you make smart decisions, whether you run a business or are simply curious about finance.
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