What term is used to describe the financial position of a company at a specific point in time?

The balance sheet is the financial statement that provides a snapshot of a company’s financial position at a specific point in time. It lists the company’s assets, liabilities, and equity, thus allowing stakeholders to assess its financial stability and liquidity. This statement is essential because it reflects what the company owns and owes on a given date, making it distinct from other financial statements that cover a period of time. For example, while the income statement measures performance over a period through revenues and expenses, and the cash flow statement tracks the flow of cash in and out over a period, the balance sheet captures all of this information at a designated moment, fulfilling the need for a precise overview of the company’s financial standing. The statement of retained earnings, although related to equity, focuses specifically on the changes in retained earnings over time, rather than the overall financial position.