The balance sheet statement is often described as a snapshot of a company's financial condition. The balance sheet shows what the business has(assets) and what the business owes against those assets(liabilities). The difference between the assets and the liabilities shows the net worth of the business. The net worth of the business is important in that it is a measurement of the time the business is expected to stay in financial power. The balance sheet also provides the business with information on how best it is able to pay its debts.

The balance sheet assists the managers of businesses in making decisions regarding purchasing of equipment for the business. Business managers depend on the balance sheet to analyze whether buying certain equipment on debt is the right move for the business at that time. Business managers need the balance sheet to decide the best source of credit for the business at that time.