How to Prepare a Balance Sheet as a PDF

A balance sheet provides a snapshot of an entity’s financial health at a specific moment, detailing what it owns (assets), what it owes (liabilities), and the residual value belonging to its owners (equity). This financial statement helps business owners, investors, and creditors make informed decisions by evaluating a business’s financial position and stability.

Understanding Balance Sheet Fundamentals

The balance sheet is constructed around three primary components: assets, liabilities, and equity. Assets represent everything a company owns that has economic value, such as cash, property, and equipment. Liabilities encompass all financial obligations and debts a company owes to external parties. Equity, also known as owner’s equity or shareholder’s equity, signifies the owners’ residual claim on the assets after all liabilities have been satisfied.

These three components are interconnected through the fundamental accounting equation: Assets = Liabilities + Equity. This equation highlights that a company’s assets are financed either through borrowing (liabilities) or through owner contributions and retained earnings (equity). The balance sheet must always adhere to this equation, ensuring total assets equal the combined total of liabilities and equity.

Identifying and Classifying Balance Sheet Accounts

Preparing a balance sheet begins with identifying and accurately classifying all relevant financial items. Assets are categorized based on their liquidity, meaning how quickly they can be converted into cash. Current assets are those expected to be converted into cash, sold, or consumed within one year or one operating cycle. Examples include cash and cash equivalents, accounts receivable, inventory, and prepaid expenses.

Non-current assets are long-term investments not expected to be converted to cash within one year. These assets provide economic benefits over multiple years. Property, plant, and equipment (PP&E), such as land, buildings, machinery, and vehicles, are common tangible non-current assets. Intangible assets, lacking physical substance but holding value, include patents, trademarks, copyrights, and goodwill.

Liabilities are also classified by their due date. Current liabilities are short-term financial obligations due within one year or the operating cycle. Common current liabilities include accounts payable, short-term loans, accrued expenses like salaries and utilities, and the portion of long-term debt due within the current year. Unearned revenue is another example.

Non-current liabilities are long-term financial obligations due beyond one year. These typically include long-term debt, such as mortgages or bonds payable, which finance significant investments. Deferred tax liabilities and long-term lease obligations also fall into this category. Pension benefit obligations and product warranties extending beyond one year represent other forms of non-current liabilities.

Equity represents the owners’ stake in the business. For a sole proprietorship or partnership, this might be termed owner’s capital, reflecting initial investments and accumulated profits or losses. For corporations, equity is typically composed of contributed capital, which is the amount shareholders paid for their stock, and retained earnings, representing cumulative profits not distributed as dividends.

Assembling Your Balance Sheet

Constructing a balance sheet involves organizing the identified and classified accounts into a standardized format. The most common layout, known as the report form, lists assets first, followed by liabilities, and then equity, presented vertically. Another format, the account form, displays assets on the left side and liabilities and equity on the right. Regardless of the chosen layout, clarity and logical grouping of accounts are important.

The process begins by listing current assets, generally ordered by liquidity, such as cash, accounts receivable, and inventory. These are then subtotaled to arrive at Total Current Assets. Following this, non-current assets like property, plant, and equipment, and intangible assets are listed and summed to provide Total Non-Current Assets. The sum of Total Current Assets and Total Non-Current Assets yields the grand total of all assets.

Next, current liabilities are listed and subtotaled, including items like accounts payable and short-term loans. Subsequently, non-current liabilities, such as long-term debt and deferred tax liabilities, are presented and summed. The total of current and non-current liabilities provides the Total Liabilities figure. Finally, the equity section is detailed, encompassing owner’s capital or contributed capital and retained earnings, which are then summed to get Total Equity.

An important final step in assembling the balance sheet is to verify that the accounting equation, Assets = Liabilities + Equity, holds true. The total assets figure must precisely match the sum of total liabilities and total equity. Any discrepancy indicates an error in identification, classification, or calculation, requiring a review of all entries to ensure accuracy.

Exporting Your Balance Sheet to PDF

Once the balance sheet is accurately prepared and balanced, converting it to a PDF format is a straightforward process, regardless of the software used. For those utilizing accounting software like QuickBooks or Xero, the export function is typically built-in. Users can navigate to the reports section, select the balance sheet, and look for an “Export” or “Print” option, often located in the upper-right corner or within a file menu. From the export options, selecting “PDF” will generate the document.

If the balance sheet was prepared using spreadsheet software such as Microsoft Excel or Google Sheets, exporting to PDF is also readily available. In Excel, the “Print” function often includes an option like “Microsoft Print to PDF” or “Save as PDF.” Similarly, Google Sheets offers a “Download as PDF” option under its “File” menu.

For documents prepared in other applications, or if a direct export option is unavailable, virtual PDF printers provide a universal solution. These are software applications that install as a printer on your computer. When you “print” a document from any application, you select the virtual PDF printer instead of a physical printer. This action then prompts you to save the document as a PDF file, effectively converting any printable content into a PDF.