Presentation on theme: "It is a sheet produced at the end of a financial year stating a summary of a firms assets, liabilities and capital. What is a balance sheet? Assets being."— Presentation transcript:
It is a sheet produced at the end of a financial year stating a summary of a firms assets, liabilities and capital. What is a balance sheet? Assets being the resources owned by a business. Liabilities being the debts of a business. Capital being the money put into the business by the owner(s).
Here is an example of a balance sheet by a company named Kodak.
The structure of Balance sheets may vary between different companies, however, they all provide of financial summary of a firm. Structure
In all balance sheets, the value of assets will equal the value of liabilities and capital. This is because all resources purchased by a business have to be financed from either capital or liabilities. Therefore; Assets = Capital + Liabilities Equation
Current assets are assets that will be changed into cash within one year. It includes ; Stocks Debtors Cash Current assets
Current Liabilities are business debts which must be repaid within 12 months. They include; Trade creditors Leases and hire purchase Short term loans and overdrafts Current liabilities
Long term liabilities is any money owed more than one year. They may include; A mortgage A long-term loan Long-term leases and hire purchase Long term Liabilities
Balance sheets are used to show the financial position of a business at a point in time. Examples may include; It shows the value of all business assets, capital and liabilities. It shows the performance of a business and its potential It shows the asset and capital structure of a business What for?
1.What is the equation? 2.Name one example of a Current liability 3.Name one example of a Long Term Liability 4.Name one example of a Current assets 5.How does a balance sheet benefit a business? Questions