Financial Terms / balance sheet

# Understanding Balance Sheet Assets & Liabilities

The balance sheet is divided into two sections, assets and liabilities, and each section is organized by how current the account is.

## How do I calculate the balance sheet?

```Creating a bank balance sheet in a spreadsheet requires careful organization of financial data and the use of appropriate formulas. Follow these steps to create a bank balance sheet:

1. Open a spreadsheet software such as Sourcetable.
2. Create a new blank spreadsheet and label the columns as "Assets," "Liabilities," and "Equity."
3. List all the bank's assets in the "Assets" column, including cash, loans, investments, and other financial holdings. Each asset should be listed in a separate row.
4. In the adjacent column, assign a value to each asset. For example, if the bank has \$1,000,000 in cash, enter this value in the cell next to the "Cash" asset.
5. Sum up the total value of assets by using the appropriate formula. In the cell below the last asset, use the formula "`=SUM(cell range)`" to calculate the total assets. For example, if your assets are listed in cells A2 to A10, enter "`=SUM(A2:A10)`" in the cell below A10.
6. Move to the "Liabilities" column and list all the bank's liabilities, such as customer deposits, outstanding loans, and other debts. Each liability should be listed in a separate row.
7. In the adjacent column, assign a value to each liability. For instance, if the bank owes \$500,000 in customer deposits, enter this value in the cell next to the "Customer Deposits" liability.
8. Sum up the total value of liabilities using the "`=SUM(cell range)`" formula, similar to step 5, but this time for the liabilities column.
9. In the "Equity" column, list the bank's equity items, such as retained earnings and capital contributions.
10. Assign a value to each equity item in the adjacent column, similar to steps 4 and 7.
11. Calculate the total equity using the "`=SUM(cell range)`" formula, as done previously for assets and liabilities.
12. Finally, insert a row at the bottom of the spreadsheet and label it "Total." Use the "`=SUM(cell range)`" formula to calculate the total assets, liabilities, and equity. For example, if your assets, liabilities, and equity are in cells A2 to A10, B2 to B8, and C2 to C5, respectively, enter "=SUM(A2:A10)" in the cell below the "Assets" column, "`=SUM(B2:B8)`" in the cell below the "Liabilities" column, and "`=SUM(C2:C5)`" in the cell below the "Equity" column.

By following these steps and utilizing the appropriate formulas, you can create a bank balance sheet in a spreadsheet that accurately reflects the bank's financial position.```

## What is a Balance Sheet?

`A balance sheet is a financial statement that reports a company's assets, liabilities, and shareholders' equity on a given date. The balance sheet is used to calculate financial ratios.`

## What information does a balance sheet provide?

`A balance sheet provides information about a company's assets, liabilities, and shareholders' equity.`

## What is the purpose of a balance sheet?

`The purpose of a balance sheet is to provide information that can be used to calculate financial ratios and gain insight into a company's financial position.`

## What is the formula for calculating financial ratios?

`The formula for calculating financial ratios is `Ratio = (Value of Assets / Value of Liabilities) x 100`.`

## Key Points

The Balance Sheet Shows a Company's Resources and Sources of Capital
The balance sheet is a financial statement that records a company's assets, liabilities, and equity at a specific point in time. It provides a snapshot of what a company owns, what it owes, and its total worth. The assets side of the balance sheet lists all of the resources the company owns, such as cash, accounts receivable, inventory, and equipment. The liabilities side lists all of the company's debts, such as accounts payable and loans. The equity section is the difference between the assets and liabilities, and it represents the company's net worth.