Analyzing a balance sheet is an important method of ensuring the financial health of a company. It presents its assets, liabilities, and equity at a specific moment in time. In general, the balance sheet is divided into three main parts: assets, liabilities, and equity. Assets are the resources owned by the firm. These are broken down into current assets, consisting of cash, inventory, and receivables, and non-current assets, which comprise property, plant, equipment, and intangible assets. Liabilities are another company's obligations to others that it owes. These can be divided into current liabilities, such as accounts payable and short-term debt, and long-term liabilities, encompassing long-term debt and deferred tax liabilities. Equity represents ownership interests and is simply calculated by taking total assets minus total liabilities: common stock, retained earnings, and additional paid-in capital. The equation which defines a balance sheet is Assets = Liabilities + Equity.