1. Copyright © Texas Education Agency, 2012. All rights reserved. Financial Balance Sheet Analysis Statistics & Risk Management 1

2. Copyright © 2011 Texas Education Agency. All rights reserved. “Copyright and Terms of Service Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as the property of the Texas Education Agency and may not be reproduced without the express written permission of the Texas Education Agency, except under the following conditions: 1)Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the Materials and Related Materials for the districts’ and schools’ educational use without obtaining permission from the Texas Education Agency; 2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual personal use only without obtaining written permission of the Texas Education Agency; 3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any way; 4) No monetary charge can be made for the reproduced materials or any document containing them; however, a reasonable charge to cover only the cost of reproduction and distribution may be charged. Private entities or persons located in Texas that are not Texas public school districts or Texas charter schools or any entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written approval from the Texas Education Agency and will be required to enter into a license agreement that may involve the payment of a licensing fee or a royalty fee. Call TEA Copyrights with any questions you have.

3. Copyright © Texas Education Agency, 2012. All rights reserved. Asset Section Cash (Liquid) Assets Cash (Liquid) Assets – Petty Cash – Bank Accounts – Accounts Receivables 3

4. Copyright © Texas Education Agency, 2012. All rights reserved. Asset Section Fixed Assets Fixed Assets – Inventory – Equipment – Real Estate 4

5. Copyright © Texas Education Agency, 2012. All rights reserved. Liability Section Short Term Short Term – Accounts Payable – Current Loan Payments Long Term Long Term – Loans – Notes – Bonds 5

6. Copyright © Texas Education Agency, 2012. All rights reserved. Equity Section Net-Worth (Sole-Proprietorship) Net-Worth (Sole-Proprietorship) – Assets-Liabilities Equity (Corporation) Equity (Corporation) – Retained Earnings – Capital Stocks 6

7. Copyright © Texas Education Agency, 2012. All rights reserved. Capital Section Equity Stock Equity Stock – Preferred Paid First Paid First Dividends Dividends No Voting Rights No Voting Rights – Common Capital Gains Capital Gains Dividends Dividends 7

8. Copyright © Texas Education Agency, 2012. All rights reserved. Example Notice the Owner’s Equity or Net Worth. 8

9. Copyright © Texas Education Agency, 2012. All rights reserved. Special Purpose Entity SPEs is a legal entity created to fulfill narrow, specific or temporary objectives. SPEs is a legal entity created to fulfill narrow, specific or temporary objectives. SPEs are typically used to isolate the firm from financial risk. SPEs are typically used to isolate the firm from financial risk. http://en.wikipedia.org/wiki/Special_purpose_entity 9

10. Copyright © Texas Education Agency, 2012. All rights reserved. Special Purpose Entity SPEs are also commonly used to: SPEs are also commonly used to: – hide debt, – hide ownership, – and obscure relationships between different entities, which are in fact related to each other. http://en.wikipedia.org/wiki/Special_purpose_entity 10