A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It lists the company's assets, liabilities, and equity, following the fundamental equation: Assets = Liabilities + Equity. This helps stakeholders understand what the company owns, what it owes, and the residual interest of the owners. Assets are divided into current and non-current categories, while liabilities are also classified as current and long-term. Current assets include cash and inventory, while long-term assets might consist of property and equipment. Understanding a balance sheet is essential for investors, creditors, and management to assess financial health.