A balance sheet summarizes what a company owns (assets), what it owes (liabilities), and the residual value belonging to shareholders (equity). It is one of the three core financial statements used to assess a company's financial health.

Example: A SaaS company's balance sheet shows $5M in cash (asset), $2M in deferred revenue (liability), and $3M in accounts receivable (asset), giving investors a clear picture of the company's financial position.