A balance sheet is an important statement of any business of the company and it is an important document that provides a piece of essential information regarding the assets, the liabilities, and the equity of the business.
Assets are item s of value that the company must have in order to operate or function normally and in this case, Mr. Kohli must ensure that before he commences the share market business, he must ensure that he has sufficient assets to support the business.
Liabilities are the amount of money that is a company or any business owes their creditors. For instance, such things are the employees, tax authorities, creditors, and suppliers of the business or the company. Mr. Kohli should ensure that before he starts the share market business, he must know well how better to handle the liabilities because if not well handled the business can be bankrupt because of insolvency. Mr. Kohli must also know how often the business can be paying the liabilities back.
Finally, Mr. Kohli must ensure that he has full knowledge and understanding of the equity which constitutes all the earnings retained by the shareholders in exchange for the ownership of the business or the company.