Understanding Balance Sheet

Balance Sheet is perhaps the most important document of a business by whichonecan understand the health of a business.  This is so because it lists the assets held by a business on one side and on the other side are listed sources of those assets (own capital or outside liabilities).  It is very much simple to understand even for a non finance background person.  All big businessmen who talk and deal with big figures are not finance people.  Some ratios can be calculated to understand the short-term and long-term solvency of the business.  Inter-firm and intra firm camparisons can also be made.