Balance Sheet A Balance Sheet n Is a
Balance Sheet
A Balance Sheet n Is a statement of a firms assets, liabilities and share capital on a particular date.
Assets n n Are things that a firm owns. They can be current or fixed.
Current Assets n n n Are owned by the firm. They change from year to year. Examples include: n n n Anything receivable due Anything payable prepaid Bank (money in the bank) Cash (money in cash box. . ) Closing Stock Debtors (people that owe the firm money)
Fixed Assets n n n Are owned by the firm. They last a long time. Examples include: n n n Buildings Equipment Fixtures & Fittings Machinery, motor vehicles Premises
Depreciation n n Is loss of value of an asset due to wear and tear. Example: a new Ford Transit van purchased for delivering goods costs € 21, 865 new, but will be worth less after one year
Net Book Value (NBV) n n Fixed Asset – Depreciation = NBV € 10, 000 - € 500 = € 9, 500
Liability n n Is something a business owes another firm. It can be current or long term.
Current Liability n n n Is something that a firm owes. It is paid within one year. Examples include: n n n Accruals, payable due Anything receivable prepaid Bank Overdraft Creditors (people you owe money to) Dividends declared
Long Term Liabilities n n n Is something a firm owes. It takes longer than one year to pay off. Example: Long Term Loan.
Authorised Share Capital n Is the maximum number of shares a company can sell.
Issued Share Capital n Is the actual number of shares a company has sold
Capital Employed n n Is all the money that is invested in the business. Includes: n n n Issued Share Capital Long Term Loans Reserves
Working Capital n n n Current Assets – Current Liabilities. CA > CL = Liquid You have enough cash to run the business CA < CL = Overtrading You do not have enough cash to run the business.
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