A balance sheet helps individuals and business owners understand where their finances stand during a specific time period. A person reading a balance sheet can learn a lot about a business and its viability.

If you’re running a business and looking for potential investors, or you’re an individual readying to approach lenders, you will be asked for a copy of financial statements. For businesses, the finances to be reviewed are the balance sheet, income statement, statement of retained earnings, and statement of cash flows. An individual will have similar information that can be used on a balance sheet, but it is primarily used to give an overview of investments and assets. Click here to read more.