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17. Generating Financial Statements > The Balance Sheet
If a profit and loss report is like a video, a balance sheet is more like a portrait. This report (Reports?Company & Financial?Balance Sheet Standard) shows how much your company owns (assets), how much it owes (liabilities), and the resulting equity in the company at a given point in time. While a profit and loss report tells you whether you’re making money, the balance sheet helps you analyze your company’s financial strength.
One thing you can count on with a balance sheet is that there’s a steady relationship among the total assets, total liabilities, and equity, as you can see in Figure 17-6. The Balance Sheet report earns its name from math, not magic; here’s the formula that puts the “balance” into balance sheets:
