Balance Sheet
A balance sheet provides an overview of the assets, liabilities, and owner’s equity in a business at a given point in time. It tells an observer how much money a business owes to its creditors, what assets it owns or is owed, and how much money the shareholders have invested in the business.
It follows the simple formula: Assets = Liabilities + Owner’s Equity
Most websites are sold as asset sales with any liabilities excluded from the transaction. However, when purchasing a website business with its liabilities included, it is important to carefully study the website’s balance sheet that has been prepared by an accountant.
Author: Kris Tabetando
Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.
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