The term balance sheet refers to a financial statement that reports a company's assets, liabilities, and shareholder equity at a specific point in time. Balance sheets provide the basis for computing rates of return for investors and evaluating a company's capital structure.
In short, the balance sheet is a financial statement that provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders. Balance sheets can be used with other important financial statements to conduct fundamental analysis or calculate financial ratios.
The balance sheet adheres to the following accounting equation, with assets on one side, and liabilities plus shareholder equity on the other, balance out:
Assets = Liabilities + Shareholders’ Equity
| Balance Sheet 5 Year Summary | ||||||
|---|---|---|---|---|---|---|
| Period Ending | 12/31/17 | 12/31/18 | 12/31/19 | 12/31/20 | 12/31/21 | |
| Current Assets: | ||||||
| Cash | $526,391 | $2,333,293 | $331,915 | $1,101,338 | $1,771,633 | |
| Accounts receivable | - | 585,000 | 8,925,000 | 17,825,000 | 28,125,000 | |
| Total current assets | 526,391 | 2,918,293 | 9,256,915 | 18,926,338 | 29,896,633 | |
| Fixed Assets: | ||||||
| Equipment - selling | - | 80,000 | 80,000 | 80,000 | 80,000 | |
| Equipment - administrative | 8,000 | 53,000 | 53,000 | 53,000 | 53,000 | |
| Accumulated depreciation | (1,596) | (9,441) | (36,041) | (62,641) | (89,241) | |
| Total fixed assets - net | 6,404 | 123,559 | 96,959 | 70,359 | 43,759 | |
| Total Assets | $532,795 | $3,041,852 | $9,353,874 | $18,996,697 | $29,940,392 | |
| Current Liabilities: | ||||||
| Accounts payable | $4,320 | $40,520 | $325,300 | $600,400 | $912,750 | |
| Interest payable | 8,883 | 45,600 | 78,933 | 78,933 | - | |
| Income tax payable | - | - | - | - | - | |
| Total current liabilities | 13,203 | 86,120 | 404,233 | 679,333 | 912,750 | |
| Long-Term Liabilities: | ||||||
| Loans payable - owners | 165,000 | 180,000 | 180,000 | 180,000 | - | |
| Loans payable - investors | 500,000 | 2,500,000 | 4,500,000 | 4,500,000 | - | |
| Loans payable - banks | - | 500,000 | 500,000 | 500,000 | - | |
| Total long-term debt | 665,000 | 3,180,000 | 5,180,000 | 5,180,000 | - | |
| Total Liabilities | 678,203 | 3,266,120 | 5,584,233 | 5,859,333 | 912,750 | |
| Equity: | ||||||
| Common stock - owners | 20,000 | 20,000 | 20,000 | 20,000 | 20,000 | |
| Common stock - investors | - | - | - | - | - | |
| Retained Earnings | (165,408) | (244,268) | 3,749,641 | 13,117,364 | 29,007,642 | |
| Total equity | (145,408) | (224,268) | 3,769,641 | 13,137,364 | 29,027,642 | |
| Total Liabilities & Equity | $532,795 | $3,041,852 | $9,353,874 | $18,996,697 | $29,940,392 | |
