Learn · Explainer
How to read a balance sheet
Assets, liabilities and shareholders' equity: what each holds, why the sides always match, and what negative equity means.
The short answer
A balance sheet lists what a company owns (assets), what it owes (liabilities) and the difference (shareholders' equity) on one date, usually the last day of its fiscal year or quarter. The two sides always balance: assets equal liabilities plus equity. At the end of fiscal 2025, Apple had total assets of $359.2B, total liabilities of $285.5B and shareholders' equity of $73.7B.
The equation
Assets = liabilities + shareholders' equity
Everything a company owns was paid for either with borrowed money and other obligations (liabilities) or with shareholders' money, including profits kept in the business over the years (equity). So the two sides always match. Apple's figures for fiscal 2025: $359.2B of assets equals $285.5B of liabilities plus $73.7B of equity.
Source: Apple 10-K for fiscal 2025, filed Oct 31, 2025
Assets
- Current assets are expected to turn into cash within a year: cash and cash equivalents, short-term investments, money owed by customers (accounts receivable) and inventory. Apple's cash and cash equivalents were $35.9B.
- Non-current assets last longer: property, plant and equipment, long-term investments, goodwill and other intangible assets from acquisitions.
Liabilities
- Current liabilities are due within a year: bills owed to suppliers (accounts payable), wages and taxes owed, debt coming due, and payments received for things not yet delivered (deferred revenue).
- Non-current liabilities come due later: long-term debt, lease obligations, pensions and deferred taxes. Apple's long-term debt was $78.3B.
Shareholders' equity
Equity is what would be left for shareholders if every asset were sold at its value on the books and every liability paid. It's mostly money shareholders put in (common stock and paid-in capital) plus retained earnings (past profits not paid out), minus treasury stock (shares bought back). It's an accounting figure, not what the company would sell for: market cap is usually far higher.
When equity is negative
Equity can fall below zero when a company has paid out more to shareholders through buybacks and dividends over the years than it has kept in profits, often funding part of it by borrowing. AbbVie, Philip Morris International, Dell, McDonald's, Altria, Booking Holdings, Starbucks and Lowe's reported negative shareholders' equity at their latest fiscal year end. For companies like these, ratios built on equity, such as return on equity or debt-to-equity, stop meaning much.
Source: McDonald's 10-K for fiscal 2025, filed Feb 24, 2026 · Lowe's 10-K for fiscal 2025, filed Mar 23, 2026 · Starbucks 10-K for fiscal 2025, filed Nov 14, 2025
A bank's balance sheet
A bank's assets are mostly loans and securities, and its liabilities are mostly customers' deposits. Equity is a thin layer by comparison. JPMorgan Chase reported total assets of $4.42T and shareholders' equity of $362.4B at the end of fiscal 2025, so equity was about 8.2% of assets. Regulators set minimum capital levels for this reason.
Source: JPMorgan Chase 10-K for fiscal 2025, filed Feb 13, 2026
Where to find it
In the 10-K under Item 8, Financial Statements, called the Consolidated Balance Sheets (or Statement of Financial Position). It shows the last two year-end dates side by side. Each 10-Q has one for the end of the quarter. The notes explain the main lines, such as debt, leases and goodwill.
Assets and equity for 91 companies
From each company's latest 10-K balance sheet, sorted by equity as a share of assets. Shareholders' equity here is the part that belongs to the company's own shareholders, before noncontrolling interests. A negative figure means liabilities are larger than assets.
Common questions
What is on a balance sheet?
Assets, liabilities and shareholders' equity on a single date. Apple's latest balance sheet shows $359.2B of assets, $285.5B of liabilities and $73.7B of equity. Source: Apple 10-K for fiscal 2025.
Why does a balance sheet always balance?
Because every asset was paid for by either liabilities or equity. Equity is defined as assets minus liabilities, so the two sides match by construction.
What does negative shareholders' equity mean?
That liabilities are larger than assets on the books. It often follows years of buybacks and dividends larger than retained profits. It doesn't by itself mean a company is in trouble, but it makes equity-based ratios meaningless.
What is the difference between the balance sheet and the income statement?
The balance sheet is a snapshot of one date. The income statement covers a period, such as a year, and shows revenue, costs and profit. Net income for the year flows into retained earnings on the balance sheet.
Is book value the same as shareholders' equity?
Yes, book value usually means shareholders' equity. Book value per share divides it by the number of shares outstanding.
Disclosures
- Editor holdings
- The editor holds shares of Tesla (TSLA) in a long-term retirement account. The editor holds no position in any other company named on this page. As of Oct 25, 2026.
- Compensation
- Nobody paid for this page. No affiliate links on this page.
- Sources
- Each company's own SEC filings, linked next to each number.
- Last updated
- Oct 26, 2026
General education, the same for every reader. Not a recommendation to buy, sell or hold any security, and it doesn't consider your situation.
More in Learn and Tools · Methodology & Disclosures explains where every number comes from.