The Balance Sheet Formula is a foundational concept of business and accounting that states that the total assets held by a company must equal the total liabilities plus any owner’s equity. In other words, you can think of it as a snapshot of a company’s financial health. The formula proves useful for business owners or investors who want to evaluate the stability and overall cash value of a company’s assets in comparison to its liabilities. Put simply: Assets = Liabilities + Equity; understanding your company’s balance sheet is key to ensuring your long-term success!