When it comes to understanding business finances, there are two important concepts you need to know about: balance and cost basis. A balance is the amount a company or individual has in an account at any given time. This can include money, securities, and other assets. Cost basis, on the other hand, is the original purchase cost of a security. It’s important to understand both of these terms because they both affect your net worth and overall financial health. Balance is what you have now, while cost basis helps determine your potential future profits or losses. Knowing both can help you make better decisions when it comes to investments and other financial transactions.