Applications of Financial Statements

659 Words3 Pages
Introduction Balance sheet is a report on financials that summarize company’s assets, what the company owns, the liabilities of the company, what the company owes. Most Company’s still use balance sheet in the daily running of organization because it enables managers in knowing whether balance sheet balances out on both sides. This makes sense since the company must pay all things it uses such as the assets by borrowing money (liabilities) or getting the money from the shareholders that are the shareholders’ equity. Application of balance sheet to my daily life Balance sheet can help me to grasp the financial health in a given business organization and it also provides me with a snapshots for my potential investors and lenders (Hawkins…show more content…
Many investors tends to compare the company’s present balance sheet to enable them find out whether it has any increased debts or not, by building up the inventory, and depleting cash which might raise concern. Balance sheets helps government agencies in making sure those businesses are complying with the set laws. It provides information for all the potential lenders or customers in businesses on credit worthiness in the business. Applications of balance sheet to my current or future position First, the balance sheet provides me with an overview of having the most significant balance sheet showing the developments in the rising market economies. Second, Balance sheet introduces general terms such as the Balance Sheet Approach (BSA) as well as its application on the development of market economies which will help me to know how to deal with certain problems in my business in future. Balance Sheet Approach explains the basic concept that underlies the approach of examining consequences of financial crises, which are taking place in the world of today. Lastly, the balance sheet will also help me to demonstrate on how I can identify the vulnerabilities, which are carried out in the Balance Sheet Approach. Conclusion Balance sheet is a snap shot in a company’s financial location at a point. Balance sheet changes every time, and this makes it different from profit plus loss
Open Document