What is a Balance Sheet?
A Balance Sheet shows a company’s financial position at a specific moment.
It is divided into three main parts:
- Assets → What the company owns
- Liabilities → What the company owes
- Equity → Money invested by shareholders + retained profits
The most important formula is:
👉 Assets = Liabilities + Equity
If this formula is true, the balance sheet is said to “balance”.
Balance Sheet Builder Game
A Balance Sheet shows what a company owns (Assets),
what it owes (Liabilities) and what
belongs to shareholders (Equity).
The golden rule:
Assets = Liabilities + Equity
How to Play: Drag each financial item into the correct column and click Check Answers. Try to balance the sheet!
Items (Drag Me)
Assets
Liabilities
Equity
Understanding the Balance Sheet
A Balance Sheet shows three key components of a company’s financial position:
1. Assets: What the company owns (cash, inventory, receivables).
2. Liabilities: What the company owes (loans, payables).
3. Equity: Shareholder value (capital, retained earnings).
The formula must always hold true:
Assets = Liabilities + Equity
This interactive game helps beginners understand balance sheet structure by placing items in the correct category—just like real financial statement analysis.
Why This Game Matters
Understanding a balance sheet is one of the most important skills in stock market fundamental analysis. Investors, analysts, banks, and even business owners use balance sheets to judge a company’s financial strength.
This game simplifies the core concepts so beginners can learn by doing.
📘 1. What Are Assets?
Assets are things the company owns.
These items help the business operate and generate revenue.
Examples:
- Cash
- Accounts Receivable (money customers owe)
- Inventory
- Machinery, Buildings (PP&E)
Assets add value to the company.
📙 2. What Are Liabilities?
Liabilities are obligations — things the company owes to others.
Examples:
- Accounts Payable (money owed to suppliers)
- Short-Term Loans
- Long-Term Borrowings
Liabilities must be paid back in the future.
📗 3. What Is Equity?
Equity represents ownership in the company.
It shows how much of the business belongs to shareholders after liabilities are paid.
Examples:
- Share Capital (money raised from investors)
- Retained Earnings (profits kept in the business)
📏 4. Why Must a Balance Sheet Balance?
Every asset must be funded either by:
✔ Borrowing money (Liabilities)
✔ Shareholder money (Equity)
That leads to the famous formula:
Assets = Liabilities + Equity
If this condition holds, the balance sheet “balances” — and the company’s finances are correctly recorded.
🎮 How This Game Helps You Learn
This game turns balance sheet structure into an easy, fun, interactive experience:
- You drag each item into the correct category
- You see instant scoring and feedback
- You learn why each item belongs where it does
- You understand how asset, liability, and equity values interact
- You visually experience the balancing formula
This makes fundamental analysis much easier when you study real companies.