NEW YORK (TheStreet) -- The company has a superb balance sheet... The balance sheet is solid... The balance sheet remains steady...The balance sheet. When it comes to stock analysis, it's something that's referred to a lot. But why?Simply put, the balance sheet is one of the most important financial documents you can use to evaluate a company's fundamentals (
Supplies inventory: $10
Property and equipment: $5
Total assets: $15 Liabilities and Stockholders' Equity
Shareholders' equity: $10
Total liabilities and stockholders' equity: $15
Even though the kid spent that $15 on his or her lemonade business, that amount remains on "the books," both in the assets section (since the drink-making supplies are still on hand until the drinks start selling) and the liabilities and stockholders' equity section (money the kid put into the company is his or her equity, and the kid still owes Mom and Dad that $5).