A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time, detailing its assets, liabilities, and shareholders' equity. It reflects what the company owns and owes, as well as the invested capital. The balance sheet is structured around the accounting equation: Assets = Liabilities + Shareholders' Equity. In contrast, an [[income statement]], also known as a profit and loss statement, summarizes a company's revenues and expenses over a specific period, such as a quarter or year. It shows how much money the company earned or lost during that time by highlighting its operational performance. While the balance sheet provides information about financial stability and liquidity at one moment in time, the income statement offers insights into profitability and operational efficiency over time.