What does a balance sheet display?

A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It displays key components that include assets, liabilities, and shareholders' equity, allowing stakeholders to assess the company's financial health.

The balance sheet shows assets, which are resources owned by the company, and liabilities, which are obligations the company owes to outside parties. The difference between these two categories is known as shareholders' equity. This structure is essential for understanding how much the company owns versus what it owes, thus allowing investors and managers to gauge the financial leverage and liquidity of the business.

The other options do not accurately represent a balance sheet's purpose. Total revenue generated in a financial year pertains to an income statement, which details a company's profitability over a specific period. Cash flow projections relate to liquidity management and cash flow statements, providing insights into expected cash inflows and outflows over the upcoming period. Employee performance metrics are metrics evaluated through human resource management and do not have a place on a financial statement like the balance sheet.