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Definition:
Definition:
A balance sheet is a statement of the total assets and liabilities of an organisation in a given date, usually the last day of a financial period.
It contains information on the value of an organisation's assets, liabilities and the capital invested by the owners.
Equity
Equity
Equity is the money invested in the company or business to generate income.
It comes from two different sources:
Share capital
Provided by the shareholders through the purchase of shares
Reserves/Accumulated Retain Profit
Refers to the past profits that were kept rather than paid out as dividends
Key Terms:
Key Terms:
Fixed Asset
Current Asset
Current Liability
Long-term Liability
Working Capital
Capital Employed
Limitations of Balance Sheets:
Limitations of Balance Sheets:
Balance Sheets tend to focus on a specific time frame of the business which could result in outdated data being used to make
There is no specific standard template for making balance sheets
Balance sheets lack specific variables such as:
Intangible Assets = non-physical fixed assets such as:
brand value, trademarks, copyrights
goodwill and market faith
Value of Human Capital
Example Balance Sheet
Example Balance Sheet
Created by: Ms K. Gleaves (circa. 2015)
Created by: Ms K. Gleaves (circa. 2015)
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