What is a Balance Sheet?
A balance sheet is a spreadsheet used to find your net worth at a specific point in time. You subtract your total liabilities from your total assets. If you calculate your net worth on a periodic basis, you can determine whether your total assets are growing or shrinking. To increase your net worth, you must shrink your debt (liabilities) and grow your assets.
[Total Assets – Total Liabilities = Net Worth]
Assets = What do you own and what is it worth? Liabilities = What do you owe and what does it cost you?