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Balance sheet

A balance sheet is a financial statement that provides a snapshot of a company's financial position at a particular point in time. It shows the company's assets, liabilities, and equity, and it is used to calculate key financial ratios and metrics such as the debt-to-equity ratio and the return on equity.

Here is an example of how a balance sheet might look:

ABC Inc.

Balance Sheet

As of December 31, 2020

ASSETS

Current assets:

Cash $100,000

Accounts receivable $200,000

Inventory $150,000

Total current assets $450,000

Non-current assets:

Property, plant, and equipment $1,000,000

Intangible assets $250,000

Total non-current assets $1,250,000

Total assets $1,700,000

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable $100,000

Accrued expenses $75,000

Total current liabilities $175,000

Non-current liabilities:

Long-term debt $500,000

Total non-current liabilities $500,000

Total liabilities $675,000

Equity:

Common stock $500,000

Retained earnings $525,000

Total equity $1,025,000

Total liabilities and equity $1,700,000

In this example, ABC Inc. has total assets of $1,700,000, including $450,000 in current assets and $1,250,000 in non-current assets. It also has total liabilities of $675,000, including $175,000 in current liabilities and $500,000 in non-current liabilities. Finally, it has total equity of $1,025,000, including $500,000 in common stock and $525,000 in retained earnings.

The balance sheet provides a snapshot of a company's financial position at a particular point in time, and it can be used to calculate key financial ratios and metrics that provide insight into the company's financial health and performance.

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