Preparing a balance sheet

• 1). Start preparing your balance sheet with the heading. This contains three pieces of information: the name of the company; the type of financial statement; and the period the balance sheet covers. The balance sheet of a company from Jan. 1 of one year to the next will be different than the same balance sheet of the company from June 1 of one year to the next.
  
  
• 2). Calculate your assets. Assets are often listed in order of most liquid value, such as cash, to least liquid value (plants, property, and equipment). Other assets might include cash substitutes like jewelry, inventory, investments, accounts receivable, or paid for services that have not yet been rendered. In some cases, assets will also include intangible benefits such as goodwill or intellectual property.
  
  
• 3). Calculate liabilities. This shows all money owed by an individual or organization. Much like assets, this is listed from most short-term to long-term, but instead of liquidity it is listed by when the liability is due to be paid off. Accounts payable, or money that needs to be paid for services already rendered is often first, followed by other short-term things like taxes and salaries, and finally long-term liabilities such as bonds and loans.
  
  
• 4). Calculate equity. Equity is comprised of equity paid in by shareholders or owners, which is often the largest value, as well as a total of revenue and expenses. Once the revenue and paid in capital are added, and expenses subtracted, the total should equal the assets minus the liabilities, also known as the 'balance'.