A balance sheet is a financial statement that provides a snapshot of a company’s financial position at a specific point in time, detailing assets, liabilities, and equity. It offers insights into what the company owns and owes, as well as the amount invested by shareholders. By comparing current and previous balance sheets, stakeholders can assess the company’s financial health, liquidity, and long-term solvency. This information is crucial for making informed business decisions, evaluating the company’s ability to meet its short-term obligations, and understanding its capital structure. Additionally, a balance sheet helps investors and creditors gauge the risk and return potential of their investments or loans.