1. Learning Aim – To understand the purpose of a Balance Sheet
Success Criteria – To create our own Balance Sheet
Key words – Balance Sheet, Assets, Liabilities
5 mins. Need worksheets and books placed around tables. Exercise books also. Post it notes

2. The Balance Sheet
A business OWES things
It also OWNS things

3. Liabilities – Things you owe
The Balance Sheet
Assets – Things you own
Liabilities – Things you owe

4. The BALANCE Sheet
What happens if we OWE more than we OWN?

5. Fixed Assets
A fixed asset is anything that you own as a business that can be useful to your business for longer than one year.

6. Fixed Assets
What fixed assets would a restaurant have?

7. Is this a fixed asset?
In your own words, explain why the toilet roll is NOT a Fixed Asset.

8. Current Assets
Current assets last LESS than 12 Months! Once you use them then they have gone and need to be replaced.

9. Current Assets Stock – Ingredients/materials Cash – In the till
Debtors – People who owe you money

10. The balance sheet Owe Own Current liabillities Fixed Assets
CurrentAssets

11. Fixed or current asset?

12. Can you think of examples of each for a greengrocer?
Balance Sheet
Fixed Assets, Current Assets, Current Liabilities
Can you think of examples of each for a greengrocer?

13. Open your envelope – Can you put the balance sheet in the right order?

14. Current liabilities
Current Liabilities are things that a business will need to pay out for within 12 months.
Creditors are people that your business owes money to e.g. your suppliers. They will want paying back within ONE year!
Overdrafts and credit card borrowing also need to be paid back and they are normally paid within ONE year.

15. Current Assets – Current Liabilities
Working Capital
Current Assets – Current Liabilities
Why is working capital so important?

16. Questions
Why is it important for your assets to equal your liabilities?
What might happen to a business if it owes more than it owns?
How can a business reduce what it owes (liabilities)?
Is there a problem with owning too much (having too many assets)?