What information can you obtain from balance sheet?

Answer 1

A balance sheet, also called a "statement of financial position", reveals a company's assets, liabilities and owners' equity (net worth). The balance sheet, together with the income statement and cash flow statement are used to identify/gauge a company's financial status or position. If you are a shareholder of a company, it is important that you understand how the balance sheet is structured, how to analyze it and how to read it.

Answer 2

The balance sheet reports permanent accounts with a balance. All assets, liabilites, and owners capital + net income/retained earnings will go into the balance sheet. You want to make sure your accounting equation stays in balance. (Assets=liabilities + owner's capital)

Temporary accounts such as expense accounts and drawing do not go into the balance sheet.

Answer 3

the solvency or insolvency of the business