# Balance sheet

What a business owns and owes on one date, the difference its equity.

The [income statement](https://searchspheresource.com/glossary/income-statement) tells you whether the business earns; this tells you what condition it is in, and the two disagree more often than a first-time buyer expects. A profitable company with stretched payables, aging receivables, and a lien on its equipment is a different purchase from an identically profitable one without them, and the [working-capital](https://searchspheresource.com/glossary/working-capital) level you will argue over at closing is read from here.

In numbers: A business with $2,400,000 of assets against $1,500,000 of liabilities shows $900,000 of equity, and the working capital inside those two figures is what you have to fund on day one.

Source: https://searchspheresource.com/glossary/balance-sheet
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

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