The Basics of Financial Statements
The basics of financial statements start with a balance sheet. This represents what you own (assets), what you owe (liabilities), and what you’re worth (equity). Below is a basic example of a balance sheet.
Assets |
|
|---|---|
| Cash in Checking Account | $12,000 |
| Cash in Security Deposit Account | $8,250 |
| Total Current Assets | $20,250 |
| Office Furniture/Equipment | $1,500 |
| Real Estate – 123 Main Street (Book Value) | $73,500 |
| Real Estate – 456 Elm Street (Book Value) | $125,000 |
| Real Estate – 789 Oak Street (Book Value) | $320,000 |
| Total Non-Current Assets | $520,000 |
| Total Assets | $540,250 |
Liabilities |
|
|---|---|
| Accounts Payable (Bills Due) | $1,450 |
| Security Deposit Liability | $8,250 |
| Total Current Liability | $9,700 |
| Real Estate Mortgage – 123 Main Street | $52,325 |
| Real Estate Mortgage – 456 Elm Street | $75,000 |
| Real Estate Mortgage – 789 Oak Street | $200,500 |
| Total Non-Current Liability | $327,825 |
| Total Liabilities | $337,525 |
Equity |
|
|---|---|
| Total Equity (Assets Minus Liabilities) | $202,725 |