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Article: In the balance: how to read your balance sheet.(Strickly Business)
- Article from:
- Custom Home
- Article date:
- January 1, 2004
- Author:
CopyrightCOPYRIGHT 2004 Hanley-Wood, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Many custom builders get a balance sheet for review at the end of each month from their accounting system. I find, however, that very few of them use this report as a tool to analyze their companies' financial results.
A balance sheet is simply a snapshot of a business's financial condition at a specific moment in time, usually at the close of an accounting period. A balance sheet comprises assets, liabilities, and owners' or stockholders' equity. Assets and liabilities are divided into short- and long-term obligations including cash accounts such as checking, money market, or government securities. At any given time, assets must equal liabilities plus owners' ...