Total Assets = Total Liabilities + Total Owner's Equity. The statement must always balance.
Working Capital = Current Assets minus Current Liabilities. Positive working capital indicates healthy short-term operational liquidity.
A P&L shows performance over a period (income and expenses). A Balance Sheet is a snapshot at one date showing what you own (assets) versus what you owe (liabilities) plus owner equity.
Because every asset you own was funded either by money you owe (liability) or money you or investors put in (equity). If the two sides do not match, something is missing or misclassified.
Check for un-entered assets, missing owner capital, double-counted items, or expenses accidental recorded as assets. The generator flags an imbalance so you can trace and correct the entries.
Current Ratio = Current Assets ÷ Current Liabilities. A ratio above 1 means you can cover short-term obligations; below 1 signals a possible cash-flow crunch. Banks often check this ratio before lending.
If you are unsure where an item belongs, email rautprajwal36@gmail.com and we will help you classify it correctly.