Financials 101 for Startups – Part II: The Balance Sheet

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The purpose of the balance sheet is to give, at a point in time, a picture of the financial position of a company. It has three components: assets, liabilities, and equity.

  • Assets are items that will provide a future benefit to the company, either through use of the item (for example, a prepaid computer maintenance contract or a computer hardware item) or through collection (for example, cash collected on an accounts receivable balance). Assets are listed on the balance sheet in order of liquidation (the order in which the assets will be used/collected) and include a subtotal for current assets …read more

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