## What Is a Balance Sheet?

A balance sheet is the summary of a companyâ€™s assets and liabilities. There are two essential parts of a balance sheet, the** Assets **and the **Liabilities **and **O****wnerâ€™s equity**.

**Read More:Â **How to Create Daily Bank Balance Report Format in Excel

## Financial Results from a Balance Sheet

There are five main financial results we can get from a balance sheet.

**Debt Ratio:** This is the ratio between total liabilities and total assets.

**Current Ratio**: This is the ratio between current assets and current liabilities.

**Working Capital:** This is the difference between current assets and current liabilities.

**Assets to Equity Ratio:** This is the ratio between total assets and owner’s equity.

**Debt to Equity Ratio: **This is the ratio between total liabilities and owner’s equity.

## Steps to Make a Balance Sheet Format of a Company in Excel

### Step 1 – Make Balance Sheet Heading

Prepare the heading of the balance sheet.

- Type
**â€˜Balance Sheetâ€™**in some merged cells in a larger font size. - Enter the
**Company Name**in the next row. - Enter the years the balance sheet refers to in the next row.

**Read More:Â **Income and Expenditure Account and Balance Sheet Format in Excel

### Step 2 – Input Assets Data

- Enter the heading
**â€˜Assetsâ€™**in some merged cells at a larger font size. - Enter the heading
**â€˜Current Assetsâ€™**in the next row. Type the current asset**types**of your company on the**left**side and record the assetsâ€™**values**on the**right**side in the**yearsâ€™**columns.

**Note: **Select the **Accounting** format from the Format Cells dialog box for the asset cells.

- Â Next, you need to calculate total current assets.
- Select the
**E11 cell**and insert the following formula to calculate total current assets in the year 2021.

`=SUM(E7:E10)`

- Now, put the cursor on the
**bottom right**corner of the**E11 cell**and the**fill handle**will appear. Drag it**to the right**to calculate total current assets for the year 2022.

- The total current assets for the year 2022 also appears.

- List the other assets items and their values like the current assets list.
- Calculate the value of the total assets per year. To do this, select the
**E14 cell**and paste the following formula in the formula bar.

`=SUM(E11:E13)`

- The value of the total assets for the year 2021 is returned.
- Place your cursor in the
**bottom right**position of the**E14 cell**, the**fill handle**will appear. - Drag the fill handle
**to the right**to copy the formula and calculate total assets for the year 2022.

The asset section of the balance sheet is complete.

**Read More:** Create a Balance Sheet Format for Trading Company in Excel

### Step 3 – Input Liabilities & Ownerâ€™s Equity Data

- Enter the current liabilities, other liabilities, and ownerâ€™s equity.

- Calculate the total current liabilities by selecting the
**E20 cell**and inserting the formula below.

`=SUM(E17:E19)`

- The total current liability for the year 2021 is returned.
- Put the cursor in the
**bottom right**position of the cell and drag the fill handle**to the right**to calculate the total current liabilities for the year**2022**.

- The total current liabilities for both year has been recorded.

- Calculate the total liabilities for the following year by selecting the
**E23 cell**and inserting the following formula.

`=SUM(E20:E22)`

- Put the cursor in the
**bottom right**position of the cell and drag the fill handle**to the right**to copy the formula.

- The total liabilities for the years 2021 and 2022 have been recorded.

- Calculate the total ownerâ€™s equity by clicking on the
**E27 cell**and entering the following formula.

`=SUM(E25:E26)`

- Place the cursor on the
**bottom right**of the cell and drag the fill handle**to the right**.

- The total ownerâ€™s equity for the year 2022 is returned.

- Find the total liabilities and ownerâ€™s equity by selecting the
**E28 cell**and entering the following formula.

`=SUM(E23,E27)`

- The total liabilities and ownerâ€™s equity for the year 2021 are returned.

Drag the fill handle to the right to can calculate the total liabilities and ownerâ€™s equity for the year 2022.

**Read More:** Balance Sheet Format for Construction Company in Excel

### Step 4 – Calculate Financial Results from Balance Sheet

- To calculate the
**Debt Ratio**for the year 2021, select the cell**E31**and insert the following formula.

`=E23/E14`

- Place your cursor in the
**bottom right**position of the cell and drag the fill handle to the**right**to calculate the ratio for the year 2022.

- To find the
**Current ratio**click on the**E32**cell and insert the following formula. - Drag the fill handle to the
**right**to calculate the ratio for the year 2022.

`=E11/E20`

- To calculate the
**Working Capital**for the year 2021 select the**E33 cell**and enter the following formula. - Drag the fill handle
**to the right**to calculate the Working Capital for the year 2022.

`=E11-E20`

- Calculate the
**Assets to Equity Ratio**by selecting the**E34 cell**and entering the following formula. - Use the
**fill handle**to calculate the ratio for the year 2022.

`=E14/E27`

- Calculate the
**Debt to Equity Ratio**by clicking on the**E35 cell**and inserting the following formula. - Use the
**fill handle**to calculate the ratio for the year 2022.

`=E23/E27`

The final financial results summary will look like this.

## Advantages of Keeping a Balance Sheet

The advantages of a balance sheet are as follows:

- You can analyze a company’s growth.
- You can inform decisions like investing or withdrawing shares.
- You can track the progress of a company over several years.

## Things to Remember

- It is important to know that the balance sheetâ€™s total assets total liabilities and ownerâ€™s equity must be equal.

**Download Sample Workbook**

You can download our balance sheet template for free from here.

**Related Articles**

- Balance Sheet Format in Excel for Proprietorship Business
- Create a Format of Balance Sheet of Partnership Firm in Excel
- How to Create Projected Balance Sheet Format for 3 Years in Excel
- Create Projected Balance Sheet Format for Bank Loan in Excel
- How to Create NGO Balance Sheet Format in Excel

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Better to make column B wider than to merge cells B:D.

Hello, NIEFER!

You have pointed out a fantastic thing.

It is correct that you donâ€™t need to merge the cells B:D here. You can just enlarge the B column as much as you need. I just wanted to keep the column size closer to each other. Thatâ€™s why I merged. But, it is not necessary. Rather, it is better to enlarge the B column as the references will be simpler that way.

Thank you NIEFER for your valuable feedback. I appreciate it so much.

Regards,

Tanjim Reza

I need an accounting system for a small trading company dealing in mainly safety building items & hardware goods.

My business is mainly through a retail shop, where I buy my goods both on credit and cash. Similarly, my sales are in cash and on credit. I also maintain a stock were certain times I buy items and stock it for future sales. No online business

My expenses chart is limited to a few items like salaries, rent, admin exp etc.

Was looking out for a simple accounting system

Hello SHABBIR,

You can follow a step-by-step guide or use the free template for your simple accounting system by following this article on How to do Bookkeeping for Small Businesses.

Regards,

ExcelDemy

send me a copy

Hello, Harry!

You can download the copy from Download Sample Workbook

Regards

ExcelDemy