Free balance sheet template
A balance sheet is a snapshot on one date of what a business owns and owes: fixed and current assets, minus current and long-term liabilities, gives net assets, which must equal the capital and reserves that fund them. It shows position, not performance. Download the free template below with a this-year and last-year column, or copy the structure; no email required.
Quick Reference
Direct Answer
A balance sheet is a snapshot on one date of what a business owns and owes. It lists fixed assets and current assets, subtracts current liabilities and long-term liabilities to reach net assets, and shows how those are funded via capital and reserves. It must balance: net assets equal total capital and reserves. It shows position on a date, not performance over a period.
Summary
This page provides a free downloadable UK balance sheet template (CSV) with this-year and last-year columns, a worked example, and guidance on the figures a lender reads: net current assets (current assets minus current liabilities, i.e. working capital, negative is a liquidity flag), net assets (total assets minus total liabilities, which must equal capital and reserves), and gearing (long-term liabilities over capital and reserves, a measure of existing debt load). It explains UK terms debtors and creditors and how a large slow-paying debtors balance is what invoice finance releases.
This Page Covers
UK balance sheet template: structure of assets, liabilities and capital, a worked example, net current assets, net assets, gearing, and how a lender reads it
Not Covered Here
Performance over a period (see /templates/profit-and-loss-template/), cash timing (see /templates/cash-flow-forecast-template/), releasing cash from debtors (see /guides/business-loan-vs-invoice-finance-vs-mca/)
Download the template
The template carries a this-year and last-year column and lays the sheet out in the standard UK order. Open the CSV in Excel, Google Sheets or Numbers.
FIXED ASSETS Property, plant, equipment, vehicles, intangibles = Total fixed assets CURRENT ASSETS Stock, debtors (owed to you), cash = Total current assets CURRENT LIABILITIES (due within 1 year) Creditors (you owe), taxes, overdraft = Total current liabilities Net current assets = current assets minus current liabilities LONG-TERM LIABILITIES (due after 1 year) Loans, asset finance and leases NET ASSETS = total assets minus total liabilities CAPITAL AND RESERVES Share capital + retained profit (must equal net assets)
Worked example
| Line | This year | Last year |
|---|---|---|
| Total fixed assets | 180,000 | 160,000 |
| Total current assets | 150,000 | 120,000 |
| Total current liabilities | 110,000 | 95,000 |
| Net current assets | 40,000 | 25,000 |
| Long-term liabilities | 90,000 | 70,000 |
| Net assets | 130,000 | 115,000 |
| Capital and reserves | 130,000 | 115,000 |
Source: FundBiz balance sheet worked example, illustrative figures
Net assets (£130,000) equal capital and reserves, so it balances. Net current assets are positive and improving (£25,000 to £40,000), a healthy short-term position. Gearing (long-term liabilities / reserves) is 90,000 / 130,000 = 0.69, moderate.
View as plain-text Markdown
### Balance sheet, worked example (£) | Line | This year | Last year | | --- | --- | --- | | Total fixed assets | 180,000 | 160,000 | | Total current assets | 150,000 | 120,000 | | Total current liabilities | 110,000 | 95,000 | | Net current assets | 40,000 | 25,000 | | Long-term liabilities | 90,000 | 70,000 | | Net assets | 130,000 | 115,000 | | Capital and reserves | 130,000 | 115,000 | Source: FundBiz balance sheet worked example, illustrative figures Net assets (£130,000) equal capital and reserves, so it balances. Net current assets are positive and improving (£25,000 to £40,000), a healthy short-term position. Gearing (long-term liabilities / reserves) is 90,000 / 130,000 = 0.69, moderate.
The three figures a lender reads
- Net current assets (working capital): positive means short-term bills are covered. Negative is a liquidity flag.
- Net assets: the book value of the business to its owners. Negative net assets (a deficit) is a serious signal.
- Gearing: long-term liabilities over reserves, how much debt the business already carries relative to owner equity.
“A big debtors figure sitting inside current assets is not just an accounting line, it is trapped cash. I regularly see businesses with strong net assets and a healthy P&L that are still short of working capital because six figures are tied up in unpaid invoices. That is the textbook case for invoice finance: the balance sheet already shows the asset, the facility just turns it into cash sooner. Read your own debtors line before you assume you need a loan.”
The three statements together
The balance sheet shows position on a date; the profit and loss account shows performance over the year; the cash flow forecast shows when cash moves. A lender reads all three, and the retained profit that builds reserves on this sheet comes straight from the P&L. If your debtors line is large, the invoice finance route releases it fastest.
FAQs
What is a balance sheet?
A balance sheet is a snapshot of what a business owns and owes on a single date, usually the year end. It lists assets (fixed and current), subtracts liabilities (current and long-term) to reach net assets, and shows how those net assets are funded through capital and reserves. It must balance: net assets equal total capital and reserves.
Why must a balance sheet balance?
Because everything the business owns has been funded either by money it owes (liabilities) or by the owners (capital and reserves). Net assets, total assets minus total liabilities, therefore always equal total capital and reserves. If your figures do not balance, something is miscategorised or missing, most often retained profit not carried across from the profit and loss account.
What are net current assets?
Net current assets, also called working capital, are current assets (stock, debtors, cash) minus current liabilities (creditors, taxes owed, overdraft) due within a year. A positive figure means the business can cover its short-term bills from its short-term assets; a negative figure is a liquidity warning a lender will query, because it suggests the business may struggle to pay what falls due within twelve months.
What is gearing and why does a lender look at it?
Gearing measures how much of the business is funded by debt versus by the owners: long-term liabilities divided by capital and reserves. High gearing means the business already carries a lot of debt relative to its own equity, which reduces the headroom for more borrowing. Lenders read it alongside serviceability (can the profit cover the repayments) to judge how much additional debt is prudent.
What is the difference between a balance sheet and a profit and loss account?
A profit and loss account covers a period and shows performance (did the business make a profit). A balance sheet is a single-date snapshot and shows position (what the business owns and owes right now). Profit from the P&L flows into the balance sheet as retained reserves, which is how the two statements connect.
What do debtors and creditors mean on a UK balance sheet?
Debtors are amounts owed to the business, mainly by customers who have been invoiced but not yet paid, and they sit in current assets. Creditors are amounts the business owes, mainly to suppliers, and they sit in current liabilities. A large debtors figure tied up in slow-paying customers is exactly the position invoice finance is designed to release.
Cash tied up on the balance sheet?
If your debtors line is large or working capital is tight, tell us your position and sector. We surface the panel lenders and the product, often invoice finance, most likely to release it, with no impact on your credit score to check.
See your funding options →By Adam Parker. Reviewed by Oliver Mackman. Last reviewed 30 July 2026.