Set2Success - CMA USA

Balance Sheet
A balance sheet provides a snapshot of what a company owns (assets) and what it owes (liabilities), revealing its financial position. The elements of a balance sheet are Assets, Liabilities, and Equity.

Assets
Shows everything the company OWNS.
Two categories of Assets:
Current Assets: Assets that can be converted to cash or used within a year.
Example: Cash, cash equivalents, accounts receivable, stock inventory, marketable securities.
Long-term Assets: Resources that a company uses for more than a year to generate income.
Example: Fixed assets like property, plant, equipment, land, machinery, buildings, fixtures, and vehicles.

Liabilities
Shows everything the company OWES.
Two categories of Liabilities:
Current Liabilities: Obligations due in less than 1 year.
Long-term Liabilities: Obligations due in more than 1 year.

Shareholder’s Equity
A company’s Net Worth.
Formula:
Shareholder’s Equity = Assets - Liabilities