What does a balance sheet primarily report?

A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It primarily reports the assets, liabilities, and shareholders’ equity of the business. Assets include everything the company owns, such as cash, inventory, property, and equipment. Liabilities represent what the company owes to others, including loans, accounts payable, and other obligations. The difference between total assets and total liabilities is equity, which indicates what remains for the owners after all debts have been settled.

This comprehensive view allows stakeholders, such as investors, creditors, and management, to assess the company's financial stability and liquidity. By focusing on what the business owns and owes, along with the residual value for owners, the balance sheet encapsulates essential information about the company's value and financial health.

In contrast, the other options mention aspects that do not relate to the balance sheet. Sales pertain to the income statement, employee salaries are part of operating expenses, and investment income would typically be reported on the income statement or in perhaps cash flow statements, but not in the balance sheet context. Thus, the balance sheet's role is distinct and centered on capturing a business's financial standing regarding ownership and debt at a given time.