Free Balance Sheet Template

This balance sheet excel template is an easy-to-use tool that collects your data inputs through simple questions and then automatically generates your balance sheet for you! Plus it will tell you when it balances or if it doesn't. To make things even easier, we have created a step-by-step video guide that shows you exactly how to make a balance sheet so you aren't left with any confusion!

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Learn how to create a balance sheet in minutes

Using this excel and google sheet balance sheet template you can generate a ready to use balance by just punching in your data as answers to the questions on the input tab

Perfect for use as a small business balance sheet applying for a loan or just trying to review finances.


How to Create your own Balance Sheet Without a Template

1. Format Your Balance Sheet – The first thing you need to do is format your balance sheet.  In the simplest form all you need to remember with your Balance Sheet is that Assets = Liabilities + Owner’s Equity.  You can see the basic line items that make up a balance sheet in the image below.  

Balance Sheet

2.  Enter Starting Balances – The first thing you need to do is enter starting balances.  I am going to show you an example of a fictitious business called Adam’s Lawn Care.  When I started the business my balance sheet was pretty empty as you can see below.  All I had was a bit of cash in the bank, a lawnmower, and some “Paid in Capital” which was my personal investment into the company to purchase the lawnmower initially.

Balance Sheet Example

You can also see that the $4,500 in cash that I have also shows up in the Paid in Capital section as my investment into the company.

3.  How Sales Impact the Balance Sheet

So the next thing that will hopefully happen with the business is SALES!  So let’s assume I get a contract with 5 local businesses to mow their grounds.  I will do the work, and then invoice the company and expect to get paid in 30 days.  Let’s say that I charge each company $1,000 for the first month of work, so I would have $5,000 in sales, but the day after I invoice that does not show up as cash on the balance sheet yet.  Instead it shows up as Accounts Receivable.

4.  How Expenses Impact the Balance Sheet

In the process of generating those sales I will have some expenses like fuel, oil, meals, etc.  Let’s assume that I have $1,000 worth of expenses half of which I paid with cash, and the other half I paid with a credit card.  So let’s see how that changes my balance sheet.

Balance Sheet Example

Now you will also notice above that Retained Earnings went up to $4,000.  Retained earnings is all of your cumulative net profit or net loss.  So as of right now I have $5,000 in income and only $1,000 in expenses so I have a $4,000 net income that flows through to retained earnings on the balance sheet.

5.  How Does a New Loan Impact the Balance Sheet

Finally I want to show you how the balance sheet changes when I buy a small office for my business.  I had to get a loan from the bank to purchase the building, so my liabilities increase by the loan amount of $75,000, and my assets increase by the price of the building, $75,000.

New Balance Sheet Example

I hope this has been helpful to see how different transactions impact the balance sheet.  As you are creating your own financial model, just remember that each transaction that impacts an asset, must impact a liability or equity account equally so that you always stay balanced.

Balance Sheet FAQs

  • What is a balance sheet?  A balance sheet is a financial statement that reports a company’s assets, liabilities and equity at a specific point in time.  
  • How to read a balance sheet? A balance sheet will show you the assets, liabilities and equity of a company.  The assets are at the top of the balance sheet, followed by the liabilities and finally the equity section at the bottom.  Your total assets should equal your total liabilities plus your equity.  
  • How to calculate retained earnings on a balance sheet?  Retained earnings is the cumulative net income over the life of the company.  So for example, if you have been in business 10 years and had a net income of $100,000 per year, your retained earnings would be 10 x $100,000 = $1,000,000.  
  • What is goodwill on a balance sheet?  Goodwill on the balance sheet is created when your company acquires another company for more than the net asset value of the company.  So for example, let’s say that you acquire a company for $1 million, but the net asset value of that company is only $700,000.  That would mean that $300,000 of the value of the company is goodwill.
  • What goes on a balance sheet?  Here is a list of common categories on the balance sheet:

Assets

Current Assets

  • Cash in Bank
  • Accounts receivable
  • Inventory
  • Prepaid Expenses
  • Other Current Assets

Fixed Assets

  • Machinery & equipment
  • Furniture & fixtures
  • Leasehold improvements
  • Land & buildings
  • Other fixed assets
  • Accumulated depreciation

Other Assets

  • Intangibles
  • Deposits
  • Goodwill

Liabilities and Equity

Current Liabilities

  • Accounts payable
  • Taxes payable
  • Notes, short-term (due within 12 months) 
  • Current part, long-term debt
  • Other current liabilities

Long-term debt

  • Bank loans payable
  • Notes payable to stockholders
  • LESS: short-term portion
  • Other long term debt

Owner’s Equity

  • Invested Capital
  • Retained earnings - beginning
  • Retained earnings - current
  • Total Owners’ Equity

  • What are assets on a balance sheet?  The most common asset categories to be listed on a balance sheet are:

Cash in Bank

Accounts receivable

Inventory

Prepaid Expenses

Other Current Assets

  • What are liabilities on a balance sheet?  The most common liabilities on a balance sheet are:

Current Liabilities

  • Accounts payable
  • Taxes payable
  • Notes, short-term (due within 12 months) 
  • Current part, long-term debt
  • Other current liabilities

Long-term debt

  • Bank loans payable
  • Notes payable to stockholders
  • LESS: short-term portion
  • Other long term debt

  • How to fill out a balance sheet?  To fill out a balance sheet you must enter in all of your current assets and liabilities along with owner’ equity onto a balance sheet template. 
  • What does a balance sheet look like? Below you will find an example balance sheet:

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