The Balance Sheet is a table showing all the firm’s assets and liabilities.
Items on a balance sheet:
- Cash & Equivalents: highly liquid assets on hand by a firm
- Recieveables & Payables: unofficial debts, e.g., regular grocery purchases, etc.
- Inventories: Items not sold
- Property, Plant, & Equipment (PP&E), i.e. Durable capital assdets
- Stockholder’s Equity: money recieved by purchasers of stock
Properties.
- Assets and liabilities must always sum to zero.
- counts book value, not market value ⇒ hard to measure the “value” of a firm
- soft skills (e.g. brand image, reputation) are not reflected (the market may better reflect intangibles).