Nick Garcia, Ric Ross, Raisah Salhab, Megan Stanley, Jimee Truong The Balance Sheet Team 15 Nick Garcia, Ric Ross, Raisah Salhab, Megan Stanley, Jimee Truong
Objectives Define a balance sheet Discuss the importance of a balance sheet Identify the components of a balance sheet Explain when balance sheets are published Explain who prepares a balance sheet Describe where balance sheets can be located for companies
Assets = Liabilities + Owners’ Equity What is a Balance Sheet? The balance sheet is a snapshot of a firm's financial status at one point in time Assets, Liabilities, Owners’/Shareholders’ Equity Assets = Liabilities + Owners’ Equity
Why is a balance sheet important? Paints a picture of the firm’s financial state at a given time Being aware of the financial status of a business is vital to running it Documentation: It is an efficient way to track expenditures and assets to gain a good idea of where the firm is at financially Knowing the financial status of a firm is important in making any financial and investment decisions
The Balance Sheet Components Assets: Things of value that the business owns Cash, furniture, land Liabilities: Amounts that the firm owes to others like suppliers Notes or wages payable Owner’s equity: Claims of the owner Capital or retained earnings
Assets Current assets Cash Prepaid expenses Items that have been paid for but not yet used or consumed Inventory may be the largest current asset Goods ready for sale, raw materials Value of inventory on a balance sheet is the cost required to replace it if the inventory were to be destroyed, lost, or damaged Fixed assets Distinguished from current assets by their longevity Not for resale Furniture, buildings, land
Assets
Liabilities Arranged in how soon they must be repaid Current liabilities Taxes payable Notes payable to banks Wages and salaries Obligations to creditors due within 1 year Long-term liabilities Debts that must be repaid after more than 1 year May include start-up financing from banks, finance companies
Liabilities and Stockholders’ Equity
Liabilities and Stockholders’ Equity
When are balance sheets published? Prepared and published at the end of the close of an accounting period Month-end Quarter-end Semi-annual Year-end The balance sheet can be seen as an important decision-making tool
Semi-annual Balance Sheet
Company Annual Report
Regulatory Filing
Published by Company and Auditors
Published by Company and Auditors
Where to find online Public Company Investor Relations Annual Report Quarterly Filings Financial News finance.yahoo.com Motley Fool Securities and Exchange Commission Complete Complex
Motley Fool (fool.com)
Securities and Exchange Commission (sec.gov)
References Kelly WN, Peterson AM, eds. Leadership and Management in Pharmacy Practice. 2nd ed. Boca Raton, FL: CRC Press; 2014. Motley Fool. Available at: http://www.fool.com/quote/nyse/williams- sonoma/wsm/sec-filings Accessed October 27, 2015. Securities and Exchange Commission. Company Filings Search. Available at: http://www.sec.gov/edgar/searchedgar/companysearch.html Accessed October 27, 2015. Williams-Sonoma. (2015). 2014 Annual Report. Retrieved from: ir.williams- sonomainc.com/sites/williams- sonomainc.investorhq.businesswire.com/files/doc_library/file/WS_14AR.pdf
Objectives Define a balance sheet Discuss the importance of a balance sheet Identify the components of a balance sheet Explain when balance sheets are published Explain who prepares a balance sheet Describe where balance sheets can be located for companies