The Balance Sheet is a snapshot of a company's financial condition at a single point in time. It has three parts, they are of the following:

• Assets
• Liabilities
• Shareholders' Equity

Assets are listed in order of liquidity followed by Liabilities. The difference between Assets and Liabilities is Shareholders' Equity. Shareholders' Equity is also known as Total Equity or Book Value. The Balance Sheet will tell us whether the company will survive a recession. We are looking for a "Fortress Balance Sheet".

Ratios and Equations

• Total Receivables to Revenue
• Inventory
• Property/Plant/Equipment
• Goodwill
• Intangibles and Brand Name
• Long Term Investments
• Total Assets
• Notes Payable/Short Term Debt
• Current Port. of LT Debt/Capital Leases
• Adjusted Debt to Equity Ratio
• Preferred Stock
• Retained Earnings
• Treasury Stock
• Return on Shareholders' Equity
• True Return on Shareholders' Equity
• If Shareholders' Equity is Negative

Example

Balance Sheet for Johnson & Johnson (JNJ)

Source: Google Finance