The Balance Sheet tool is a spreadsheet designed to prepare a two column balance sheet. Balance sheets are used for two primary purposes. The first is financial analysis of an ongoing business. The second is an inventory of assets and liabilities to provide an estimate for the liquidated value of a business. Balance sheets play a large role in a lender's decision to advance credit based on collateral available for loans.
The Balance Sheet is a major source of financial information as it provides a snapshot of the financial position of the business at a given point in time. Successive Balance Sheets over time indicate the ability to earn growth in equity through operations of the business.