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Understand a Company's Balance Sheet

By October 10, 2012

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A company's balance sheet is a statement of its financial position at a point in time. It states the amount of the company's assets, liabilities, and owner's equity at the point in time. The balance sheet shows what a company owns, its assets, and what it owes, its liabilities and owner's equity. The balance sheet is only one of the financial statements that, if the company is public, has to be filed according to FASB.

Business owners have to first learn how to read a balance sheet and then learn how to develop a balance sheet. One important thing to remember about the balance sheet is that the value of the assets is stated at the book value, not the fair market value. If you're trying to value a stock, you can't just take the values of the assets of a company off the balance sheet.

In order to learn how to read a balance sheet, check out this article!

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