A balance sheet is a financial statement that reports a company's assets, liabilities, and equity at a specific point in time. It provides a snapshot of the company's financial position and helps investors and analysts evaluate the company's financial health and performance.

The balance sheet is divided into two sections: assets and liabilities and equity. The assets section includes all the resources that the company owns or controls, such as cash, inventory, property, and equipment. The liabilities and equity section includes all the company's debts and obligations to others, such as loans, accounts payable, and shareholder equity.

The balance sheet follows the accounting equation, which states that assets must equal liabilities plus equity. This means that the total value of the company's assets must be equal to the total value of its liabilities and equity. The balance sheet is typically prepared at the end of each accounting period, such as quarterly or annually, and is used by investors, creditors, and management to assess the company's financial position and make informed decisions.