The balance sheet identifies the productive resources (assets) that a firm uses to generate income, as well as the sources of funding from creditors (liabilities) and owners (shareholders' equity) that were used to buy the assets.

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The balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time. It provides a snapshot of a company's financial position and helps investors and analysts understand how the company has deployed its resources and how it has financed its operations. The assets section of the balance sheet lists the various resources that a company has, such as cash, investments, inventory, property, and equipment. Liabilities represent the company's obligations to pay back loans, suppliers, and other creditors. Shareholders' equity represents the ownership interest in the company that is held by shareholders. By analyzing the balance sheet, investors can assess a company's financial health, liquidity, and solvency.

The Balance Sheet Identifies the Productive Resources (Assets) That a Firm