The balance sheet is a financial statement listing all the assets of the company, the liabilities of the company and the stockholders’ equity of the company.
If a company’s assets total $100,000 and their liabilities total $60,000 that means that 60% of the company (60,000/ 100,000) is owned by creditors and 40% by the owners. The smaller the portion owned by creditors, the more likely the company will be able to survive in hard times.
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