One of the most important things to understand about the balance sheet is that it must always balance. Total assets will always equal total liabilities plus total equity. Thus, if a company's assets increase from one period to the next, you know for sure that the company's liabilities and equity increased by the same amount.
Let's now take a deeper look at the various sections of the balance sheet. Although there are potentially many more specific line items that we could cover, we're going to stick with the most common, and in our opinion, the most important sections that investors should be aware of.
Current Assets >>