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Balance sheet template

Get a clear picture of your company’s financial position in a few clicks with this easy-to-use balance sheet template.
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How to use the balance sheet template

Gather key financial documents

Compile financial data to reflect assets, liabilities, and equity, such as bank statements, loan balances, and capital contribution.

Understand assets and liabilities

Organize financial data according to what the company owns, what it owes, and the portion that belongs to shareholders.

Populate your sheet

Make a copy of the balance sheet template and populate it with your company’s data. Repopulate and update on a quarterly basis.

Bring your business’s performance into focus with a balance sheet

What you can glean from your balance sheet

A balance sheet is a powerful financial tool that clearly shows your company’s financial standing. By building one accurately and refreshing it regularly, you can make better business decisions, assess risk, attract investors, and maintain financial stability as you grow.

Analyze Your Results
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Boosting performance with balance sheet insights

To strengthen your financial position over time, focus on increasing assets and reducing liabilities. This could be achieved, for example, by increasing sales revenue, reducing operating expenses, or paying down debt. Other strategies might include improving cash flow through better inventory management or collecting receivables faster, renegotiating loan terms, or cutting unnecessary expenses.

Dive Into Your Numbers
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Breaking down balance sheets

A balance sheet is a financial document that spells out a company’s value. It is sometimes referred to as a “statement of financial position.” A balance sheet lists all of a company’s assets, liabilities, and owners’ equity at a specific point in time called the “reporting date.” Generally speaking, a company will produce a balance sheet on a quarterly or monthly basis.

A balance sheet isn’t just for external reporting — it also provides valuable insights into your company’s financial health. Investors and lenders rely on balance sheets to assess risk and determine creditworthiness. Founders and business owners can use them to evaluate their own risk and guide strategic decisions. An accurate balance sheet can help you understand liquidity, evaluate solvency, monitor financial trends, and prepare for funding opportunities.

A balance sheet includes a lot of information but the essential piece hinges on this formula:

Assets = Equity + Liabilities 

The two sides of that equation must balance out — hence the name “balance sheet.” In this instance, “assets” refers to the resources used to run the business. The other side of the equation contains financial responsibilities, called liabilities, along with the capital injected into the company and its retained earnings, called equity.

Before assembling a balance sheet, you need to gather the necessary financial data. Here’s what you’ll need:
  • Assets: Bank statements, invoices, inventory records, fixed asset records, and prepaid expenses.
  • Liabilities: Loan agreements and credit balances, payroll and benefits reports, accounts payable records, taxes payable
  • Equity: Retained earnings and capital contributions

Balance sheet assets:
An asset describes anything the company owns that has measurable value. These include current and non-current assets. Examples of current assets include cash, cash equivalents, inventory, and accounts receivable. Non-current assets include land, patents, intellectual property, and equipment used in production. Assets are commonly listed as positives (+) in a balance sheet and fall into two categories: current assets and non-current assets.

Balance sheet liabilities:
Whereas assets describe what a company owns, a liability describes what a company owes. This entails financial and legal commitments owed to outside parties, and thus they’re usually indicated as negatives (-) on a balance sheet. Just like assets, liabilities fall into two categories on a balance sheet: current liabilities and non-current liabilities.

Current liabilities describe liabilities the company has to pay within one year. In essence, they’re the day-to-day operating expenses. Some examples include rent, payroll, utilities and accounts payable, just to name a few.

Non-current liabilities describe debts or long-term financial obligations owed for a period longer than one year. A few examples include leases, loans such as venture debt or working capital, and company-issued bonds. These are more like the big-ticket expenses in the background.

Balance sheet owners’ equity:
Owners’ equity, sometimes called shareholders’ equity, describes the portion of a company’s total value that belongs to business owners after accounting for all liabilities. Owners’ equity can fall into a number of different categories, but the two main ones are contributed capital and retained earnings. Contributed capital is the initial money invested for a portion of company ownership. Retained earnings are the accumulated net profits after accounting for dividend payments. The change in retained earnings is typically the net income/(loss) reported on the Income Statement not paid out in one way or another, which then increases the company value.

How you analyze a balance sheet will depend on why you’re doing it. For example, owners, shareholders, and employees all have stakes in a company — but those stakes can look pretty different. There are many ways to dive deep into the data, and each can glean its own insights.

Ratio analysis:
One of the main ways to analyze a balance sheet involves the use of ratio analysis. This entails comparing different figures and using those results to dig deeper into a company’s performance. Some examples include liquidity ratios (which measure the ability to meet short-term obligations), solvency ratios (which measure the ability to meet long-term obligations), or debt-to-equity ratios (which divide total liabilities by total owners’ equity).

Vertical analysis vs. horizontal analysis
Vertical analysis and horizontal analysis allow you to read into a balance sheet in different, but equally enlightening ways. In vertical analysis of a balance sheet, you’d evaluate a line item value as a percentage of total assets. For example: On Apple’s Q1 2023 balance sheet, the company’s total assets (in millions) came out to $346,747. Its accounts payable came out to $57,918. Expressed as a vertical ratio, accounts payable to assets equals roughly 16.70%.

$57,918 / $346,747 = 0.1670

Horizontal analysis, on the other hand, involves comparison of the same line item in different time periods to identify patterns and trends. For example, in that same balance sheet, Apple’s total assets were $346,747 on Dec. 31, 2022, and $352,755 on Sep. 24, 2022.

Total assets
Absolute change: $346,747 - $352,755 = - $6,008
Percent change: -1.7%

Total assets is just one example, and this compares only two quarters. It goes without saying that Apple hasn’t fallen apart as an enterprise since the end of 2022 — especially after seeing its Q1 2024 numbers.

Balance sheets offer a concise overview of a company’s assets and liabilities and how they’re related. They provide the financial building blocks that indicate a company’s health. Most importantly, those building blocks are useful for financial ratios that can provide further insights into a company’s competitiveness in its industry, whether it’s taking on too much debt, or more general trend lines over time. For large companies, it’s common for balance sheet reviews to be conducted quarterly.

However you choose to dice up that data will depend on what you’re looking to learn, but a basic understanding of what’s on a balance sheet and how to read that data is essential for any business owner.

If your balance sheet doesn’t reconcile, check for these common errors first:
  • Misclassified transactions: Double-check that assets and liabilities are categorized correctly.
  • Omitted accounts: Ensure all accounts are included, especially accrued expenses and inventory adjustments, which are easy to miss.
  • Timing errors: A transaction may have been recorded in the wrong period.
  • Incorrect depreciation or inventory valuation: These adjustments can significantly impact asset values.

A pro forma balance sheet is a financial statement that projects what your business’s financial position will look like in the future. It’s structured like a traditional balance sheet with assets, liabilities, and equity, but instead of showing what your business owns and owes today, it estimates what those figures will be after specific events, such as a funding round, new product launch, or expansion.

You can also create a pro forma balance sheet for a particular point in time, even if it’s not tied to an event. You might prepare one for the end of the next quarter or fiscal year, for example, to forecast how your company’s financials could look under normal operating conditions.

Pro forma balance sheets help business owners and investors understand how planned decisions and different scenarios might impact financial health. They can show how a new loan will affect your liabilities, how an investment might increase assets, or whether your business will remain solvent after a major purchase. Model how your assets, liabilities, and equity could evolve with this free pro forma balance sheet template.

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