Balance Sheet Calculator

A balance sheet is a financial statement that shows a company's or individual's financial position at a specific point in time — what they own (assets), what they owe (liabilities), and the difference (equity or net worth). Unlike an income statement, which covers a period of time (monthly, quarterly, annually), a balance sheet is a single-date snapshot. The golden rule is the accounting equation: Assets must always equal Liabilities plus Equity. If they don't balance, there is an error in the data.

Equity (also called owner's equity, shareholders' equity, or net worth) is calculated as: Total Assets minus Total Liabilities = Equity. In more detail, equity includes paid-in capital (money invested by owners), retained earnings (accumulated profits kept in the business), and subtracts owner draws or dividends paid out. If a business has $250,000 in total assets and $150,000 in total liabilities, equity is $100,000 — this represents the owner's stake in the business.

A current ratio between 1.5 and 3.0 is generally considered healthy for most small businesses. A ratio above 1.0 means you have more current assets than current liabilities — enough to cover short-term obligations. Below 1.0 signals a potential liquidity crisis. However, the ideal range varies by industry: restaurants often run current ratios of 0.5–1.0 due to high cash velocity, while manufacturers typically target 1.5–2.5. Always compare to your industry benchmark, not a generic threshold.

Current assets are resources expected to be converted to cash or used up within 12 months — cash, accounts receivable, inventory, and prepaid expenses. Fixed assets (also called non-current or long-term assets) are resources used in operations for more than one year — buildings, equipment, vehicles, and intangible assets like patents. Fixed assets are listed at cost minus accumulated depreciation, which gives the net book value shown on the balance sheet. The distinction matters because lenders use current assets to assess short-term liquidity.

Working capital is the dollar amount left after subtracting current liabilities from current assets: Working Capital = Current Assets − Current Liabilities. It represents the cash buffer available for day-to-day operations, unexpected expenses, and growth investment. Positive working capital means the business can fund its operations without taking on new debt. Negative working capital is a warning sign the business may struggle to pay suppliers, employees, or upcoming loan payments. Lenders, particularly SBA lenders, closely examine working capital when evaluating loan applications.

The debt-to-equity ratio compares your total liabilities to your total equity: D/E = Total Liabilities ÷ Total Equity. A ratio of 1.0 means equal parts debt and equity funding. A ratio of 2.0 means the business is funded twice as much by debt as by owner equity. A good D/E ratio depends on your industry. Capital-intensive businesses like manufacturing or construction typically carry higher D/E ratios (1.5x–3.0x), while service businesses and tech companies often operate below 1.0x. From a lender's perspective, a high D/E ratio signals higher credit risk because there is less equity cushion to absorb losses.

Most small businesses should prepare a balance sheet at minimum, quarterly, or monthly if applying for a loan or managing tight cash flow. Public companies are required by the SEC to publish quarterly (10-Q) and annual (10-K) balance sheets. SBA lenders typically require balance sheets from the past 3 years plus an interim statement (within 90 days) as part of any loan application. Even for businesses that are not seeking financing, a monthly balance sheet review helps catch cash flow problems, unexpected liabilities, and equity erosion before they become crises.