Balance Sheet. A Balance Sheet Is a statement of a firms assets, liabilities and share capital on a particular date.

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Presentation transcript:

Balance Sheet

A Balance Sheet Is a statement of a firms assets, liabilities and share capital on a particular date.

Assets Are things that a firm owns. They can be current or fixed.

Current Assets Are owned by the firm. They change from year to year. Examples include: 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 Are owned by the firm. They last a long time. Examples include: Buildings Equipment Fixtures & Fittings Machinery, motor vehicles Premises

Depreciation 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) Fixed Asset – Depreciation = NBV €10,000 - €500 = €9,500

Liability Is something a business owes another firm. It can be current or long term.

Current Liability Is something that a firm owes. It is paid within one year. Examples include: Accruals, payable due Anything receivable prepaid Bank Overdraft Creditors (people you owe money to) Dividends declared

Long Term Liabilities Is something a firm owes. It takes longer than one year to pay off. Example: Long Term Loan.

Authorised Share Capital Is the maximum number of shares a company can sell.

Issued Share Capital Is the actual number of shares a company has sold

Capital Employed Is all the money that is invested in the business. Includes: Issued Share Capital Long Term Loans Reserves

Working Capital 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.