How to Develop a Balance Sheet

A balance sheet is a financial form commonly used by businesses to show how finances balance out. One side lists assets (items of value) and the other side lists liabilities (debts or obligations). At the end of creating this sheet, both sides must equal each other. A business owner commonly creates a balance sheet when seeking financing or when he wants to get an idea of how his business is doing money-wise.

Instructions

    • 1

      Create your balance sheet in a spreadsheet program like Microsoft Excel or Open Office Calc. Establish two tables that appear side-by-side. Label one table "Assets" and the other "Liabilities." Each table contains two columns --- one that lists a description of the asset or liability and another that lists the amount. Write in the date of the balance sheet at the very top of the spreadsheet page (month, day and year).

    • 2

      Break up the assets side of the balance sheet into five main sections that may apply to your business --- current assets (like cash and inventory), investments, property and equipment, intangible assets (like the value of a brand name or website domain), and other assets. Fill out each section with the assets your company holds.

    • 3

      Divide the "Liabilities" side into two main sections --- current liabilities (like accounts payable to suppliers and wages due to employees) and long-term liabilities (like debts you must repay). Fill out both sections with information about the company's obligations and debts.

    • 4

      Create an additional section under "Liabilities" labeled "Stockholder's Equity" if you run a corporation that generates stock. You can list the value of common stock held by owners of the company under this section as well as retained earnings (net income less dividends). Again, this only applies to a corporate entity.

    • 5

      Add up all sections on both sides of the balance sheet. The left side (assets) must equal the right side (liabilities and stockholder's equity, if applicable).

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