Simple Balance Sheet Template (In Excel)

Written by Dave Lavinsky

simple balance sheet template

A balance sheet is one of the most important financial statements a business owner can use to track their company’s financial health. The balance sheet shows a company’s assets, liabilities, and shareholder’s equity at a specific point in time. It is an extremely helpful document that shows how much a business owes, how much it owns, and how much money shareholders have invested in the company.

The balance sheet adheres to the following accounting equation: Assets = Liabilities + Shareholder Equity. This equation shows how the total value of a company’s assets must always be equal to the sum of its liabilities and shareholder equity. Therefore, these three components must always balance out in your balance sheet. Otherwise, you have an accounting/data error. 

The balance sheet is an essential part of a company’s overall business plan, and it should be reviewed regularly to ensure the business is on track financially. It can be used to compare the financial health of different companies engaged in the same industry, and it can be used when applying for loans or another financing. Therefore, a balance sheet is another important tool for business owners to consider when analyzing their company’s financial position.


What is a Pro Forma Balance Sheet?

A pro forma balance sheet is a document that provides a forecast of an organization’s financial position in the future. This document includes estimated numbers for a business’s assets, liabilities, and equity that are forecast to be held at a particular point in time. It can be used to predict the financial standing of an organization over the course of a few months or a few years.

The purpose of pro forma balance sheets is to provide business owners, investors, and other stakeholders with insight into how their company might look financially in the near future. This allows them to plan for any potential financial issues that may arise and make informed decisions about how to best manage their finances.

Pro forma balance sheets are prepared using historical data from past years, economic projection models, inflation rates, and other factors which may influence the organization’s future financial position. They also take into account expected changes in capital structure, such as new debt or equity investments, as well as planned acquisitions or divestitures. Once the projected numbers are calculated, they are added together and then expressed as percentages of total assets or liabilities.

Pro forma balance sheets have several advantages over standard balance sheets, such as providing an accurate forecast which helps business owners make better decisions about their company’s financial health. Additionally, this information can be compared with industry standards so organizations can gauge their performance against competitors in order to strategize effectively for long-term success.


Why You Need a Balance Sheet For Your Business

There are several reasons why a balance sheet is an essential document for your business:

  • Tracks the company’s overall financial health: The balance sheet reflects the financial position of a company at any given moment. It provides an accurate picture of the company’s current and long-term assets, liabilities, and shareholder equity, which can be used to assess whether or not the business is financially sound.
  • Helps identify current and future weaknesses: By comparing the balance sheet with past years, you can identify any weaknesses in the current year and start to plan for how you can strengthen your finances in the future.
  • Grants access to needed capital: The balance sheet is often used by banks and investors when deciding whether or not to extend a loan or make an investment in the company. Therefore, having an up-to-date balance sheet is essential in order to secure the financial resources that a business needs.
  • Evaluates your company’s performance against competitors: A business’ balance sheet can be compared to those of other companies in the same industry. This information is invaluable for making informed decisions about how to position your company in order to stay competitive.
  • Completes your business plan: A balance sheet is an essential component of a comprehensive business plan. It provides an accurate snapshot of your company’s financial position and helps potential investors and shareholders better understand the risks associated with investing in your business.


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Components of a Simple Small Business Balance Sheet

The balance sheet formula (Assets = Liabilities + Shareholder Equity) is the same regardless of the size or type of business. It includes three main categories: assets, liabilities, and shareholder’s equity.


These include anything that a company owns which has a monetary value. This can include cash, accounts receivable (money owed to the company by customers), inventory, and any other assets such as property or investments owned by the business.


This includes all money that is owed to outside parties, such as creditors, suppliers, and employees. These can include accounts payable (money owed to vendors), loans, mortgages, and any other debt obligations.

Shareholders’ Equity

This represents the company’s net worth after taking into account all of the assets and liabilities. It is essentially the amount that would be left for shareholders if the business was liquidated.


Download our sample balance sheet template to help you create your own.


How To Create a Simple Balance Sheet For Small Business

Now that you know what you need to include in your balance sheet, you’re ready to create one for your business. Creating an income statement for your small business is quite simple. All you need is a simple spreadsheet, like Microsoft Excel, to get started. Below are the steps you should take to create your balance sheet:

  1. Choose Your Period: The period of the balance sheet should reflect when you want to capture the business’s financial position. This could be a day, week, month, or year.
  2. Gather Your Data: You will need to gather all of the necessary information for each category in order to accurately create your balance sheet. This includes any assets, liabilities, and shareholders’ equity for the chosen period.
  3. Organize Your Data: Once you have all of your information, organize it into the appropriate categories on your spreadsheet. Make separate tabs for assets, liabilities, and shareholder’s equity. Create separate rows or sections for each subcategory within these three. 
  4. Create Your Balance Sheet: Now you’re ready to create your balance sheet. Begin by entering the total amount of assets, liabilities, and shareholder’s equity on your spreadsheet. Then add up the totals for each subcategory and enter the totals at the bottom of the page. Do this for each of the three tabs. 
  5. Save & Review: Review the document to make sure all of your information is correct. Remember that assets must equal liabilities plus shareholders’ equity. That means your total assets should be equal to the value of your liabilities and shareholders’ equity combined. If this is not the case, there is most likely a discrepancy in your data or an accounting error. Once balanced, finalize your balance sheet by saving it in a secure location.
  6. Update Your Balance Sheet: It’s important to regularly update your balance sheet in order to accurately reflect the financial position of your business. This should be done at least once a quarter or whenever there is a major change in the company’s finances.


Other Financial Statements

There are several other financial statements that you may need in addition to a balance sheet. These include a cash flow statement and an income statement.

The cash flow statement is a financial report that details the amount of cash that a company has available to it at any given time. It shows where the money is coming from (inflows) and going to (outflows) over a specific period of time. The cash flow statement can help determine the amount of money that is available for operations, investments, and other activities. It does not track any non-cash transactions. Therefore, while a balance sheet measures the assets, liabilities, and equity of a company, a cash flow statement specifically measures the flow of cash. 

The income statement is a financial report that summarizes the company’s revenues, expenses, and profits over a specific period of time. It shows the overall profitability of the business by subtracting its total expenses from its total revenue. The income statement can help determine how well a company is performing financially over a specific period of time. The main difference between an income statement and a balance sheet is that the former tracks change over a period of time while the latter provides a snapshot of the company’s financial position at one point in time.


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