Learning objective: Assess a program’s financial health and its trend over time using balance sheets from several dates.

The P&L shows a period of time. The balance sheet is a snapshot of a single date: everything the program owns and owes on that day.

It always balances: assets = liabilities + equity. Nonprofits call it the Statement of Financial Position and replace equity with net assets.

• Current assets and liabilities are expected to turn into cash, or be paid, within a year: cash, receivables, prepaid expenses, vendor bills, accrued payroll.
• Long-term items last longer: furniture and equipment, building improvements, and the portion of a loan due after the next 12 months.