Sample Business Balance Sheet

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Balance Sheet Overview

If you are in the beginning stages of forming your small business, you’ll soon learn there are a number of important decisions you will need to make to give your new venture the best possible chance at success. As you wade through the first steps in starting your small business, you’ll come across issues such as naming your business, creating a business plan, start-up financing, business licenses and permits, and more. One of the most important accounting-related matters to understand is the balance sheet.

This financial statement provides a snapshot of your business’s financial health. If you are thinking of applying for a business loan or seeking to attract investors, you’ll need to show a balance sheet to show the success of your business and prove that your idea is a good risk.

What is a Balance Sheet?

When seeking financing for your small business, your banker or lender may ask you for a balance sheet representing your current financial condition. The balance sheet lists your assets and liabilities in one place. An asset is anything that has value, such as equipment, real estate, or cash in your bank account. Liabilities are money you owe others, such as payroll, taxes, mortgages and more.

The key is equity. Equity represents the financial difference between your assets and liabilities. Capital or net worth, also known as “shareholder equity,” is the money that would be left if a company sold all of its assets and paid off all of its liabilities.

How Significant is a Balance Sheet?

Those who have a stake in your company’s financial success will find the balance sheet invaluable because of the many ways to analyze the information it contains. Stakeholders can look at the proportion of current assets, which is a good way to measure a company’s liquidity and its ability to handle unexpected expenses or undertake expansion projects.

Business Balance Sheet Template

The following provides an example of the types of information generally included in a business balance sheet. For more information, visit FindLaw’s Small Business Law section.

Assets

Cash $__________

Accounts receivable $__________

Inventory $__________

Short-term loans $__________

Prepaid expenses $__________

Long-term loans $__________

Land $__________

Buildings $__________

Improvements $__________

Equipment $__________

Furniture $__________

Vehicles $__________

Other Tangible or Intangible Assets $__________

TOTAL ASSETS $__________

Liabilities

Accounts payable $__________

Short-term notes payable $__________

Interest payable $__________

Taxes payable $__________

Long-term liabilities $__________

TOTAL LIABILITIES $__________

Capital or Owner’s Equity

Stock $__________

Retained earnings $__________

TOTAL CAPITAL or OWNER’S EQUITY $__________

(Total Assets will always equal Total Liabilities plus Total Capital)

A balance sheet is an important financial tool to understand the overall health of your business. This information is especially critical if you want to attract investors or apply for a business loan. You may want to enlist the help of a bookkeeper, CPA, or business attorney to put together your balance sheet.

Learn More by Consulting with a Legal Expert

Keeping a firm grasp on your company’s financial health is important to your continued success in the business world. Whether you are a sole proprietor or an LLC, speak to a skilled business and commercial law attorney in your jurisdiction to find out how you can maximize your profits and minimize your losses under the laws in your state.

Looking to start your own business? Use online DIY forms to get a legal business entity set up in minutes.

Additional Resources

• Checklist: Starting a Partnership

• Business Names and Trademarks

• Applying for a Loan: Financial Documents to Give Your Lender