The Most Valuable Asset Isn't on the Balance Sheet

Pragya Panda : Is a CA, a former banker, and now a freelancer

In my last job, I spent considerable time analysing balance sheets and projections to assess whether an entity qualifies for funding. Assets, liabilities, debt ratios, projections — I could break them down in my sleep. For a long time, I believed that in those numbers lay the secret to understanding a business. But somewhere between spreadsheets and site visits, I started noticing something.

Some companies tick all the right boxes. Yet something didn't look right. Others looked average at best, but they were built to last. What made the difference? It wasn't on the balance sheet.

A Harvard Business Review article notes that honesty is a moral choice, not a strategic one. While many believe that doing good pays off, there's little factual proof behind that belief. Yet, most people choose to act with integrity because they want to believe in themselves and earn the respect of others. More often than not, they keep their word—even when it comes at a cost.

And that's a good thing. A system where honesty comes from choice, not compulsion. It paves the way for bold collaborations and long-term vision—things no number on a spreadsheet can predict. The intangibles may not have a line item in financial reports, but they shape everything—from brand reputation and customer loyalty to employee engagement and lasting success.

Numbers Don't Shake Hands. People Do.

I once met a small business owner whose books were a work in progress. The balance sheet was messy. I would have never considered processing the loan if I had just looked at the papers. But when I sat across from him and heard how he spoke about his business and his employees — calling them by name, remembering their kids' birthdays — I realised his company had a heartbeat. He was a grassroots guy who understood profit in the most basic way. Sure, it didn't show up in Excel; but it made all the difference.

Conversely, I've encountered firms with perfect numbers where everything looked right. But dig a little deeper, and the foundation felt shaky. Most times, it was all made up. My experience taught me that there is usually something cooking when everything is perfect with the numbers!

That's when it hit me: Numbers don't tell the whole story. People do.

Why People Stay (or Leave)

You know that moment when someone does something they didn't have to — like paying for the food in the restaurant that was ordered, eaten, but not billed. A client was once offered a backdoor deal that would've boosted his profits. It was legal, but not fair. And he walked away, saying, "Not worth the cost." No one would have been wiser if he had pencilled that in. Years later, he is still standing strong. The reason is simple, he didn't compromise on quality at the expense of his customers!

At its core, business is about people. No matter what, people will always do business with people they trust and like. In a world where loyalty is expensive and employees switch jobs at the drop of a hat, relationships make them stay. If an employer maintains a personal relationship with the employees in the way that says, "I am there for you if you need anything," even with less pay and more work, they will stick with the company.

But building genuine relationships takes time. It means showing up — not just when you need something, but when others do. It means listening more than you speak. It means being honest, even when the truth is hard to hear. Culture doesn't come from table-tennis games or free coffee — it's built through mutual respect and connection. Investing in people gives a return that no investment calculator can measure.

What the Numbers Can't Tell You

We often think of goodwill as a line item during mergers . But in real life, it's built from the little things. Like calling to check in, not because there's a deal on the table, but because you care. Like remembering someone's big day or stepping in when someone needs help.

A client once said, "I do business with them because I know they won't abandon me when things get tough." No line in a P&L report can measure that.

In this world of AI , it's tempting to think we can optimise our way into success. But the truth is, all the metrics in the world won't save a business that forgets it's run by and for people.

Yes, margins matter. Efficiency matters. But when things go wrong — and they will — it's not the numbers that'll bail you out. It's the people who believe in you.

So, take a moment the next time you look at a balance sheet. Ask yourself who's behind those numbers? What kind of choices are they making when no one's watching?

It's the intangibles that are listed in rows and columns that matter. They're in relationships built over years.