Balance Sheet
Part of Speech
Noun (phrase)
Pronunciation
/ˈbæl.əns ʃiːt/
Definitions
- Balance Sheet (noun): A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.
- Balance Sheet (noun): A statement of the financial position of an entity, typically consisting of two sections: assets and liabilities, with the assets being equal to the sum of liabilities and equity.
Usage Examples
- "The accountant prepared the balance sheet at the end of the fiscal year to assess the company’s financial health."
- "A balance sheet is essential for investors to understand a company’s assets, liabilities, and equity."
- "Before applying for a loan, the company submitted its balance sheet to the bank for review."
Etymology
The term "balance sheet" comes from accounting terminology, where "balance" refers to the equality between the total of assets and liabilities (i.e., both sides must balance). "Sheet" refers to a formal document or table used to record financial information. The term has been in use since the 16th century when the concepts of bookkeeping and double-entry accounting were formalized.
Synonyms
- Financial statement
- Statement of financial position
- Balance account
- Financial report
Antonyms
- Income statement
- Cash flow statement
- Profit and loss statement
Translations
Language |
Translation |
Pronunciation |
Spanish |
Balance general |
/baˈlãnθe xeˈneɾal/ |
French |
Bilan |
/bi.lɑ̃/ |
German |
Bilanz |
/biˈlant͡s/ |
Italian |
Bilancio |
/biˈlantʃo/ |
Portuguese |
Balancete |
/ba.lãˈsetʃi/ |
Chinese (Mandarin) |
资产负债表 |
/zīchǎn fùzhài biǎo/ |
Russian |
Бухгалтерский баланс |
/buxɡaˈlʲtɛrsʲkʲɪj bɐˈlans/ |
Arabic |
الميزانية |
/al-mīzānīyah/ |
Hindi |
लेखा पत्र |
/lekha patra/ |
Japanese |
貸借対照表 |
/taishaku taishōhyou/ |
Regional Pronunciation Variations
Pronunciation of "balance sheet" can slightly vary depending on regional accents. In British English, the pronunciation may feature a softer "l," while in American English, it may have a more prominent "l" sound. In certain English dialects, the word "balance" may be spoken with a quicker rhythm, dropping the "a" sound, making it sound like "bal'ns." The term "sheet" is commonly pronounced uniformly across regions.
Historical Usage
Balance sheets date back to the early development of double-entry bookkeeping in the 15th century, pioneered by the Italian mathematician Luca Pacioli. The balance sheet has evolved from simple records of transactions to a complex financial statement used worldwide by businesses, governments, and organizations. It plays a central role in modern accounting and financial reporting, required by regulatory bodies in many countries.
Cultural Nuances
The balance sheet plays a critical role in global finance, influencing economic policies, business strategies, and investment decisions. In some cultures, balance sheets are more than just financial records; they are viewed as reflections of the ethical and business integrity of a company. For example, in some East Asian economies, a balance sheet is not only used for financial analysis but also for determining the company’s standing and trustworthiness in the market.
More Information
The balance sheet is one of the most important financial statements that provides insight into a company’s financial health. It is used by investors, creditors, and management to make informed decisions. The statement consists of three key sections: assets (what the company owns), liabilities (what it owes), and shareholders' equity (the net worth). A balance sheet is typically prepared at the end of a financial period, such as a quarter or year, and is a standard tool for financial analysis. It is often accompanied by other financial statements, such as the income statement and cash flow statement, to give a more complete picture of a company’s financial performance.