Having a snapshot of your financial health helps you make strategic decisions. With a balance sheet, you can see everything from your assets, liabilities, and shareholder equity at a fixed point in time.
This financial report shows what your company is worth. It’s valuable for many reasons, such as predicting business trends and sharing with investors when they want to review your financial performance.
While a balance sheet is great for looking at a specific period, you shouldn’t use it to judge your long-term financial trends. Instead, it's best to compare your balance sheet to other financial documents, including past balance sheets, to get a bigger picture.