A balance sheet provides a snapshot of a business’s financial status reflecting business assets, liabilities and shareholder equity over a given period. It is important because each of its sections has tax implications and it allows you to track what your business owns, owes and how much money was invested by shareholders. This information can be used to identify whether your business is succeeding or failing. Additionally, a balance sheet can be used to provide insight into what resources are available to a business and how they were financed. A balance sheet may be useful in calculating important business metrics such as liquidity, profitability and its debt to equity ratio.