What is a Balance Sheet

A balance sheet is a financial statement which describes a company’s overall financial position at a moment in time. It is considered one of the most important forms of financial statement and, in many countries, there is a legal requirement that companies submit a balance sheet to the government on a periodic basis (usually yearly), along with other accounting information. Failing to submit a balance sheet on time can result in civil or criminal liability for the company’s officers. Usually, balance sheets so submitted will be available for public inspection.

A balance sheet lists all the liabilities and assets of the company. When all of these are summed together, the end result should be zero; hence the name. Assets include cash the company has available, property, inventories of goods, equipment used for the operation of the business, amounts the company is owed by other companies, individuals or the government, as well as less tangible things such as copyrights, trademarks, goodwill and reputation. Liabilities include debts the company owes to other companies, to investors, consumers or the government.

A balance sheet is useful for giving a quick overview of a company’s financial position and, as such, is used by investors, civil servants, and stock market analysts, among others.

Excess of loans, whether it is personal loans or car loans, as long as they are unsecured loans, they will not be contributing towards debt remission.