Why does the balance sheet equation always add up? Companies hire good accountants to ensure that the balance sheet equation always adds up Balance sheet values are listed at their book value, so the balance sheet illustrates the concept that some person (or entity) will have a claim on every asset Market Values rarely change so each side of the balance sheet will always be equal to the other Because equity is either an asset or a liability Which of the following would most correctly define Net Profit? Revenue - Cost of Goods Sold = Net Profit Revs - COGS- Operating Expenses - Interest Expense - Taxes = Net Profit Operating Income - CapEx = Net Profit Cash Flow from Operating - CapEx = Net Profit