Balance sheet method is an accounting tool that companies use to measure their financial stability. It’s a way to assess the company’s assets and liabilities, calculate its equity and ultimately determine its net worth. Its name comes from the fact that it looks much like a traditional balance sheet and uses similar equations. In the balance sheet method, assets are subtracted from liabilities to arrive at the company’s shareholder equity. This provides a snapshot of how well the company is doing financially and can help inform decisions about future growth. With the balance sheet method, companies can better understand the impact of their investments, both current and future, as well as quickly identify any potential liabilities.