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Definition
A balance sheet sets out a company's assets, liabilities and equity at a moment in time. Assets minus liabilities equals equity, or net assets — the balance that gives the statement its name.
Why it matters
Lenders read the balance sheet to gauge gearing, working capital and solvency — the structural health behind the cash flow. See calculating gearing.
Related reading
Net assets
The value of everything a company owns minus everything it owes — a headline measure of financial strength,…
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Gearing ratio
The gearing ratio compares a company's debt with its equity — high gearing means heavy reliance on borrowing,…
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Working capital
The money a business has tied up in day-to-day operations — current assets minus current liabilities — and…
Read →How to calculate your gearing ratio
Gearing shows how much your business leans on debt versus its own funds. It is a quick health check lenders…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.