Balance Sheet and Public Sector Reform Essay

A balance sheet is a statement of the assets and liabilities of a business going into depth of what the balance of income period.

The balance sheet is one of four types of financial statements that are analyzed to determine the well being of the firm. The balance sheet is also known as the Statement of Financial Position. The balance sheet provides the detailed information needed to determine the financial condition of the firm on a specific date, which is usually December 31. The balance sheet depicts what the firm owns (assets), owes (liabilities), and how much capital (shareholders’ equity) it has. “The name, balance sheet, is derived from the fact that these accounts must always be in balance. Assets

Several companies use the balance sheet to make sound business decisions. The balance sheet is like a quantitative summary of a company’s financial condition at a specific point in time, including the assets, liabilities,

A balance sheet gives an overall picture of a company's financial situation by showing the total assets of a business, including liabilities plus equity. Current assets can include cash, accounts receivable, inventory and prepayments for insurance. The balance sheet is used by investors to get an idea of what the shareholders have invested, including

The balance sheet is considered a point in time statement because it elaborates on the current position of the organization. Based on the balance sheet, the organization is able to make an educated decision to know if it’s the best time to pursue additional business. The balance sheet is usually reviewed by a creditor when searching for new opportunities. Basically, the creditor determines the company’s position by subtracting the company 's liabilities from the assets. Liabilities are the debts and obligations a facility, regardless of the magnitude of the business. Once the liabilities have been subtracted from the assets, a stakeholder 's equity is determined.

Assets and liabilities are bifurcated in current and non-current. Current asset is defined as any asset which can be converted into cash readily and will be used within one accounting period normally 1 year e.g. Receivables, Inventory, Prepaid Expenses.

The balance sheet is one of the major and critical financial statements that show the financial position of the company. The balance sheets tell the user of the

This is the source of the value of the company to its stockholders and to the stock market analyst (Yahoo Finance, 2013). The Balance Sheet may also indicate a negative Shareholder Equity which means the shareholders are losing money. The Balance Sheet also illustrates the trends in borrowing the company has used in the last year. The long term debts that are listed on the balance sheet compared to assets may indicate a problem if the debts are called in by the loaner for some unforeseen reason. There are multiple methods or ratios for determining the future profitability of a company indicated by the line items on the balance sheet (Mertz.J., 2000).

A Balance Sheet is a snapshot of an organization’s assets, liabilities, and owners’ equity at any given time. It allows the stakeholder’s to see the company's financial condition, as well as, presenting what is owned and owed. Assets are the things that are owned, and are referred to as capital. Liabilities are the amounts owed to others. In order to get an accurate picture, one must look at the whole document, and make comparisons amongst different line items.

These liabilities are described as what the business or organization owes such as accounts payable, payroll taxes due, notes payable, and mortgages payable are all liabilities. Assets are economic resources that have expected future benefits to the business (Baker & Baker, 2000). It is described as what the business or organization owns or controls. This can include cash, accounts receivable, notes receivable, and inventory.

The balance sheet is a key component in the accounting department of financial statements. The purpose it serves is to show on a specific date the amount of assets, liabilities,

| the probable future benefits, probable future sacrifices, and residual interest for a period of time

The Balance Sheet that we use at our company is a summary at that point and time of our Assets, Liabilities and worth, we

1. The allowance for doubtful accounts is fairly presented in amount- Valuation and Allocation Assertion (Compare accounts receivable according to GAAP matching principle)

Most accounting balance sheets classify a company's assets and liabilities into distinctive groupings such as Current Assets; Property, Plant, and Equipment; Current Liabilities; etc. These classifications make the balance sheet more useful. The following balance sheet example is a classified balance sheet.