Chapter four examines the balance sheet, which lists all of the items a firm owns (its assets), all of the debts the firm owes (its liabilities), as well as what is left over for the owners’ of the firm (shareholders’ equity). Students will also learn about the balance sheet’s limitations in the context of financial statement analysis, alternative forms of balance sheet presentation, the classification of assets and liabilities as current vs. non-current, common-size analysis, and, finally, the calculation of liquidity and solvency ratios using the balance sheet.