Balance Sheet

The balance sheet shows what a company owns and what it owes; the difference is what the company is "worth", at least on paper. One huge problem is that the fair market value of many assets can be very different from the "book values" shown here. So people looking for "value" stocks need to do more research, beyond the balance sheet.


Consolidated Financial Statements

Balance Sheet

(click on highlighted text for more information)


(dollar figures are in thousands) 1997 1996
Current Assets:
    Cash and Equivalents $ 2,738 $ 2,260
    Accounts Receivable 1,175 996
    Inventory 1,034 897
Total Current Assets 4,947 4,153
Real Estate (purchase price) 31,677 29,847
Equipment (depreciated value) 13,448 12,958
Goodwill (depreciated value) 3,167 3,334
Total Assets 53,239 50,292
Current Liabilities:
    Accounts Payable 1,488 1,092
    Short-term Debt 123 147
Total Current Liabilities 1,611 1,239
Long-term Debt 245 267
Other Liabilities 122 101
Total Liabilities 1,978 1,607
Total Shareholders' Equity 51,261 48,685

Article Contents
Introduction / Diagram
Income Statement
Cash Flow Statement
Balance Sheet
Books & Links



Investors generally like to see that current assets are greater than current liabilities by a comfortable margin. (To be conservative, they often exclude inventory from current assets when they do this comparison). This shows that the company probably won't suffer a cash shortage during the next year, which could force it to issue new stocks or bonds to survive.

This sample balance sheet leaves something out -- it makes it look like Assets - Liabilities = Equity, just by the definition of equity. A real balance sheet has to show how equity has actually been "built up" over the years, from stock sales and retained earnings. It then verifies that Assets really does equal Liabilities plus Equity, which is a slightly more confusing form of the same equation.


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