What is a balance sheet?

A balance sheet is fundamentally designed to provide a snapshot of a company's financial situation at a specific point in time. It lists the company’s assets, liabilities, and equity, offering a clear picture of what the company owns versus what it owes. By examining a balance sheet, stakeholders can assess the financial health of the organization, including its liquidity, financial stability, and overall capital structure.

The other options presented focus on different aspects unrelated to the fundamental purpose of a balance sheet. For instance, the summary of a client's medical history pertains to health records, not financial data. A report on employee performance deals with human resource metrics rather than the financial status of a company. Similarly, a financial forecast focuses on predicting future revenues or expenses, which does not align with the balance sheet’s goal of representing current financial status.