Balance Sheets Matter Now More Than Ever

"Banks worldwide are hoarding cash in the face of weakening balance sheets, bank failures and an incredible demand from depositors for cash. The result: a complete breakdown in global financial markets," said Paul Kedrosky in Sunday's "Weekend Reading."

You probably already knew (or at least heard) the balance sheet was an important part of any company's health, but did you realize that the numbers on that fundamental financial statement have a direct impact on the credit crunch we're facing?

A Balancing Act

Balance sheets are basically listings of a company's assets (such as cash, receivables from customers and investments), liabilities (debts) and equity (stock owned by investors like you and me). ...