A balance sheet is a photograph of a company on one day: everything it owns, everything it owes, and what is left over for shareholders. The income statement tells you how a year went; the balance sheet tells you what the company has to show for it, and whether it can survive a bad one.
The one equation
Every balance sheet obeys one rule:
Assets = liabilities + shareholders’ equity
Assets are what the company owns or is owed (cash, inventory, factories, money customers still owe it). Liabilities are what it owes (suppliers, borrowings, customer prepayments). Equity is the difference: what would be left for shareholders if every asset were sold at book value and every bill paid.
Rocket Lab’s balance sheet in one table
Rocket Lab builds launch vehicles and satellite parts. Here are the lines that matter from its last three balance sheets, in millions of US dollars:
| Dec 31, 2024 | Dec 31, 2025 | Jun 30, 2026 | |
|---|---|---|---|
| Cash and short-term investments | 419.0 | 1,016.6 | 2,302.2 |
| Current assets | 692.6 | 1,365.5 | 2,895.8 |
| Total assets | 1,184.3 | 2,324.5 | 4,187.4 |
| Current liabilities | 339.5 | 334.5 | 528.2 |
| Total liabilities | 801.9 | 602.6 | 695.2 |
| Borrowings | 56.1 | 1.7 | 1.7 |
| Shareholders’ equity | 382.5 | 1,721.9 | 3,492.2 |
| Goodwill and intangibles | 129.7 | 430.5 | 619.5 |
| Shares outstanding (millions) | 453.5 | 567.4 | 598.4 |
Check the equation on the latest column: 695.2 of liabilities plus 3,492.2 of equity is 4,187.4, the total assets. It always adds up; that is why it is called a balance sheet.
Four questions turn this table into a judgement.
1. Can it pay its bills?
Compare what turns into cash within a year (current assets) with what must be paid within a year (current liabilities). The ratio of the two is the current ratio.
Rocket Lab’s was 2.0 at the end of 2024 and 5.5 by June 2026 (2,895.8 ÷ 528.2). Below 1 deserves a closer look; above 1.5 to 2 is usually comfortable.
Then check what the current assets are made of. Cash is cash; inventory has to be sold first and receivables collected. Of Rocket Lab’s 2.9 billion, 2.3 billion is cash and short-term investments, 266.9 million inventory and 112.9 million receivables. That is a very liquid balance sheet.
2. How much does it owe?
Subtract cash from borrowings to get net debt. A negative number means net cash: the company could repay every loan today and still have money left.
Rocket Lab has 1.7 million of borrowings against 2.3 billion of cash: 2.3 billion of net cash. Debt is not a risk here.
Debt has to be judged against cash flow, not on its own. Apple, for comparison, had about 21.9 billion of net debt in June 2026, but it generated 136.7 billion of free cash flow over the previous twelve months. It could pay off that debt in two months. (See free cash flow explained.)
3. Where did the money come from?
This is the question most beginners skip. Rocket Lab’s cash grew from 0.4 billion to 2.3 billion in 18 months. Did the business earn it?
No. Rocket Lab lost 198.2 million in 2025, and its free cash flow was −321.8 million that year and −371.1 million over the twelve months to June 2026. The cash came from shareholders: shares outstanding rose from 453.5 million to 598.4 million, up 32%, and equity grew from 0.4 billion to 3.5 billion even though the company was losing money.
Raising money by selling shares isn’t bad in itself; Rocket Lab is funding a new rocket. But every new share shrinks each existing shareholder’s slice. When a company is not yet self-funding, watch the share count as closely as the cash.
4. What is soft?
Some assets can’t be sold for what the books say. Goodwill and intangibles appear when a company buys another one for more than the value of its tangible assets. They are real in the sense that the company paid for them, but they can be written down if the acquisition disappoints.
Rocket Lab’s goodwill and intangibles grew from 129.7 million to 619.5 million, so it has been buying companies. Goodwill alone is 8.6% of equity: worth knowing, not alarming. When goodwill is half of equity or more, the “book value” says less than it seems to.
A five-minute checklist
- Current ratio: above 1, and mostly cash rather than inventory?
- Net cash or net debt: and if debt, how many years of free cash flow would repay it?
- Share count: rising fast means dilution; falling means buybacks.
- Goodwill and intangibles: what share of equity?
- Receivables and inventory: growing faster than revenue can mean customers paying slowly or products not selling.
- When debt is due: the notes list maturities; a big bill next year matters more than one in ten years.
See it for any company
Tuna Terminal’s company research shows these lines and ratios for any US, Hong Kong or China A-share company, with a leverage rating and how each figure has changed. See the Rocket Lab summary, or read how to read a 10-K to find the balance sheet in the original filing.