Economic - Bank Question?

Question

what is Bank's balance sheet, assets, liabilities, and equity

please explain thank you

Answer 1

While the other two posters are correct as to what balance sheets actually are, I'm afraid they didn't get around to answering your question...A Bank's balance sheet is very different than that of a normal operating company. Most banks have limited assets that you would normally see on an operating entities balance sheet...they don't have machinery and equipment per say. (They do have branches and buildings) Bank "assets" are all the loans that they have made to others (be it a home loan, a credit card, a car loan, or a loan to a company). Their liabilities are deposits. These can be checking accounts, CDs, savings accounts, brokerage accounts etc. These accounts actually belong to someone else but are held at the bank...If someone wants their money  back, the bank has to give it to them. SO, these are their liabilities. Their equity section is just like any other...it is their stock, shareholders equity as wel as their retained earnings.

This is the simple explanation...it obviously gets more complicated as you learn it all...but this is basically it.

Answer 2

A bank's balance sheet is a snapshot of its financial standing at any one moment in time. Assets (like cash, buildings, machinery, patents, etc.(in the case of a bank it would be the loans they've made)) are the items that currently, or will in the future, add value to the company through their use (i.e. become or generate cash).  Liabilities are claims on the current or future assets of a company (like loans the company took out, bonds it issued, etc.(unique to a bank, this would include accounts such as deposits)). Equity is the value the company received for its stocks, as well as any cash the company earned and retained (did not pay out as dividends). Furthermore, there is a famous accounting equation, which must balance:

Assets = Liabilities + Equity

Answer 3

A bank's balance sheet is the list of its asset, liability, and equity accounts. Asset accounts are the accounts that hold the things of value owned by a company. The liability accounts are the accounts that hold the amounts of money a company owes. The equity accounts are the accounts that keep up with the owners money.