The Balance Sheet
The balance sheet is one of the monetary statements that particular companies and PLCs produce every year for their shargonholders. It is like a financial snapshot of the companys financial situation at that moment in time. It is worked out at the companys year end, giving the companys assets and liabilities at that moment.
It is effrontery in two halves - the turn over half shows where the money is shortly being used in the business (the net assets), and the fucking half shows where that money came from (the capital employed). The value of the two halves must be the same - Capital employed = net assets, and because the term balance sheet.
The money invested in the business whitethorn have been used to buy long-term assets or short-run assets. The long-term assets are known as fixed assets, and succor the firm to produce. Examples would be machinery, equipment, computers and so on, none of which actually pay used up in the production process. The short-term assets are known as current assets - assets which are used twenty-four hour period to day by the firm. The current assets may include cash, storehouses and debtors.
The top half of the balance sheet will therefore be made up of the total of the fixed and current assets, less(prenominal) any current or long-term liabilities the firm may have (creditors, loans and so on).
It may look as follows:-
        £ million
Fixed assets                         200
Current assets         - stock         40        Â
        - debtors         50        Â
        - cash         20        Â
        TOTAL         cx        Â
less Current liabilities         (40)                 70
NET ASSETS                 £270m
The bottom half of the balance sheet then looks at where this money came from. This depends on how the business was originally funded. The master(prenominal) source of money for a...
If you want to get a profuse essay, order it on our website: OrderessayIf you want to get a full essay, wisit our page: write my essay .
0 comments:
Post a Comment