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Construction glossary

What is a Balance Sheet?

A Balance Sheet, in the context of the construction industry, is an essential financial statement that provides a snapshot of a construction business's financial condition at a specific point in time. It summarizes the company’s assets, liabilities, and shareholders' equity, thus helping to reveal the financial health of the company. For instance, assets may comprise structures in progress, equipment, buildings, and land. Liabilities are what the company owes, including loans, accounts payable, and accrued expenses. The difference between the two, when subtracted, indicates the equity of the shareholders. This vital financial document is indispensable in decision-making processes involving potential investments, lending, and credit. By presenting a clear picture of the company's capabilities, the balance sheet also aids in risk-assessment and financial planning.

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Other construction terms

Accrued Expenses

What are Accrued Expenses?

Accrued expenses in the construction industry refer to the costs that have been incurred but not yet paid for by the end of an accounting period. These could include expenses related to labor, materia...
Workforce Management

What is Workforce Management?

Workforce Management, in the context of the construction industry, refers to the systematic process of optimizing the efficiency and productivity of a construction firm’s workforce. It entails a wide ...
Certified Payroll

What is Certified Payroll?

Certified Payroll is a specific type of payroll process required for any contractor or subcontractor working on federally funded or assisted construction projects under the Davis-Bacon Act. It is a fe...

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