Healthcare leaders today must blend clinical expertise with financial acumen to ensure their departments thrive both medically and economically. This chapter introduces the balance sheet—assets, liabilities, and equity—as a vital tool for gauging a service line’s financial health at a specific point in time. After defining assets (cash, equipment, inventory), liabilities (accounts payable, accrued salaries, long-term leases), and equity (initial funding plus retained surpluses), it walks through building a simple balance sheet from the ground up, illustrating how every transaction maintains the fundamental equation: Assets = liabilities + equity. The discussion then adapts this framework to a hospital setting, showing how a cardiology or orthopedic unit can list its medical devices, supply inventories, payer receivables, vendor debts, and reserve funds to produce a clear snapshot of its financial position. By mastering balance-sheet construction and interpretation, department heads gain transparency over resource allocation, justify capital investments—such as new imaging equipment—and identify warning signs of financial strain. Regularly updating and reviewing these statements empowers clinical managers to communicate credibly with executive leadership, plan strategically for maintenance and growth, and align operational decisions with both patient care goals and budgetary realities. Ultimately, proficiency in balance-sheet analysis becomes a cornerstone of responsible stewardship and sustainable excellence in modern healthcare.