Balance Sheet

Balance is sometimes referred to as financial statements position, report assets, liabilities, shareholders equity firm business on a specific date. The financial statements provide information about the nature and amount of investments in enterprise resources, obligations to creditors, and owner's equity in the net resource. Thus, the balance sheet can help predict the amount, timing and uncertainty of future cash flows.

Uses balance
By providing information about assets, liabilities, and shareholders' equity, the balance sheet is the basis for calculating the rate of return and evaluate the company's capital structure. In this case, the balance can be used to analyze liquidity, solvency, and financial flexibility of the company.

Companies that have a lot of debt relatively more risky because the assets would be required to pay for its fixed obligations.
Liquidity and solvency affect the entity's financial flexibility, which measures a company's ability to take effective action to change the amount and timing of cash flows so it can respond to the needs and opportunities in unexpected ways.