The balance sheet is like a snapshot of a company’s financial position at the time the statements are prepared. Every company needs to prepare a balance sheet regularly. Although the balance sheet may seem like a bible to those unfamiliar with it, it is actually relatively easy to compile. You can try following the steps below to create a balance sheet for your household budget or business.

Personal Balance Sheet

Get your financial information organized. You’ll need records of your assets and liabilities, and remember to keep your bank statements and debt balances up to date.

List your assets. Fill in the first column of the form with the name and value of your assets, both financial and tangible. Sum to get total assets. Of course, we all want our assets to keep growing. Major assets include:

• The cash balance in a bank account.
• Investments in stocks, real estate, mutual funds, etc.
• Resale price of owner-occupied houses
• The resale price of a car or other vehicle
• Resale price of personal personal property, including jewelry, furniture, etc.

Make a list of your liabilities. Fill in all liabilities and their amounts in the second column. Debt will decrease as you pay it off. Common liabilities include:

• Student loans
• Car loan
• Credit card overdraft amount
• Home loan balance

Subtract total liabilities from total assets to get net assets. Net worth increases as assets increase and liabilities decrease. Organizing your assets using your personal balance sheet will help increase your net worth.

• Update and adjust your balance sheet based on your financial goals, and try to update it at least twice a year.

Company Balance Sheet

Understand the basis for preparing a balance sheet. The balance sheet must always be balanced, and the principle behind it is the equation: Assets = Liabilities + Equity. Convert the formula: Equity = Assets – Liabilities. Equity is a measure of a company’s net worth.

Assets are the company’s resources, including cash, accounts receivable, inventory, land, buildings, equipment, etc. A classified balance sheet classifies assets into the following categories:

• Current assets include cash (money in all bank accounts), accounts receivable (money others owe you), office supplies, and other assets that can be received or consumed within a year.
• Fixed assets are mainly physical assets owned by the company including land, buildings, machinery, equipment and other assets that are expected to be used for more than one year.

Liabilities are the company’s debts, which mainly include wages payable, borrowings and accounts payable, and are usually divided into two categories:

• Current liabilities, debts such as accounts payable, taxes, or payroll that are due within one year.
• Long-term liabilities. Including long-term loans, mortgages, rentals, etc.

Equity is the capital invested by business owners or shareholders, including retained earnings and undistributed profits.

Design balance sheet layout. Fill in the assets in the left column the liabilities in the right column and the equity below.

Enter the balance. Fill in the balances of assets, liabilities, and equity respectively, always remembering that the left and right columns of the form must be balanced. That is, assets must equal the sum of liabilities and equity. If the table is unbalanced, it means that the amounts of individual items are incorrectly filled in or the statistics are incorrect.

Balance Sheet in Excel

Download the form template. There are many balance sheet templates available for Excel, download the version that best suits your company.

Open the template in Excel. Click File – Save As to get a copy of the template. Start reporting on the copy so you can continue to use the blank template later.

Fill out the form. Usually the summation formula is already added to the template and is automatically calculated after you fill out the form.

• Some tables also provide other calculations, such as gearing and working capital. Pick a version that suits your company’s needs.

Tips

• All information must be valid at the time the report is prepared, and the date of preparation needs to be written at the top of the report.