How Balance Sheets And The Benefits Of Having One

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

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 (BS) is significant to a business due to its ability to provide a “snapshot” of a company’s assets and liabilities at any given time. This financial document is a cursory representation of a business’s health. The use of comparative BS whether it be yearly, quarterly, or monthly provides the interested parties a tool to observe trends that are positive, negative, or neutral to a company’s financial health (Finkler, Jones, and Koyner,2013) .

The accounting equation: Assets = Liabilities + Owner’s Equity. Assets are the resources of the company. Examples include cash, land, buildings, and equipment. Liabilities are “outsider claims”, the company’s obligations to creditors. Examples include accounts payable, notes payable, and income taxes payable. Owner’s Equity represents “insider claims” of the company or the owner’s share of the assets. If a business is keeping accurate records this equation should always be in balance.

The Balance Sheet is another type of financial statement used by a company to see a snapshot of the company's financial position at a particular point in time. It lists the value of the company's assets followed by its liabilities. A balance sheet can be summed up by a simple equation:

The key components of the balance sheet reflect the financial position shown in the three permanent accounts: assets, liabilities, and owners’ equity. Assets are listed from most liquid to least liquid- liquidity meaning the closest or quickest form of cash. That being said, current assets are defined as cash, marketable securities, accounts receivable, inventory, and prepaid expenses. The opposite of assets, liabilities represent current and noncurrent obligations for which the company is committed. Current liabilities can include accounts payable, taxes payable, and salaries payable. Noncurrent liabilities represent commitments that extend longer than one year, such as bank loans, bonds and lease obligations. The final account on the balance sheet is owners’ equity. This represents the blood, sweat, and tears that the owner put into the company in an effort to realize a vision and see it come to fruition. The poetic version aside, owners’ equity also represents the

“The purpose of the balance sheet is to report the financial position (amount of assets, liabilities, and stockholders’ equity) of an accounting entity at a particular point in time” (Libby, Libby & Short, 2011). The information on the Balance Sheet will help managers, investors, and lenders to analyze the company’s financial capabilities. The report is only written at the end of the year and does not provide prior financial information. Therefore, the Balance Sheet should also include the other financial reports required to view the company as a whole. The Balance Sheet can also be a useful tool to analyze trends of accounts receivables and payables. The formula for the Balance Sheet is:

Balance Sheets: It provides the financial situation of the company as a whole. It records the tangible and intangible goods that the company owes or owns. The three categories in a balance sheet are assets, liabilities and shareholders’ equity. The assets are basically categorised in to current assets, fixed assets and other assets. The liabilities section of the balance sheet consists of current liabilities and long term liabilities. The shareholders equity represents the net worth of the company. In balance sheet, the shareholder’s equity is calculated as the sum of liabilities and net worth.

The balance sheet is basically all about assets, liabilities and the equity of the business. The information in the balance sheet will be especially interesting for current and potential investors of the business. The balance sheet tells to investors how much money business has, and how much money it owes and the amount of equity. At the same time it shows to managers whether the business doing well or not and for suppliers it shows whether the business is

A balance sheet portrays a company’s financial position at a given point in time. It identifies the company’s assets, liabilities, and the company’s equity. The balance sheet is derived “from the fact that the two sides of the equation (Assets = Liabilities +

The balance sheet of a company reflects exactly what a company owns and what it owes to others, making it a very important thing to be considered for stock investment.

Balance sheets and income statements are a snapshot of a company’s stability and financial situation. Combined the statements show the income, expenses, and stockholder’s equity in the company. These statements are often analyzed by financial institutions when a company comes to them needing a loan. Stockholders and other investors also look at these statements to make sure their investment will return a profit for them. This paper will look at four different companies and their balance sheets and income statements. The companies are Eastman Chemical Company, Covenant Transportation

Assets are defined as resources controlled by the entity as a result of past transactions or events and from which future economic benefits are expected to flow to the entity. (Aliling, 2013) Assets must be classified in the balance sheet as current or non-current depending on the duration over which the reporting entity expects to derive economic benefit from its use. An asset which will deliver economic benefits

Balance sheet reveals the summary of financial status or position at a point on a particular time. It provides assistance to viewer in determining the different aspects of entity, for instance, Future cash flows, Risk or financial position (Friedlan, 2010, p. 37). There are certain segments of balance sheet and those segments are assets, liabilities and owners’ equity. The relation among them is given below:

The balance sheet is used to see the overall picture of a company's financial position. It shows what the company has, how much it owes, and its net worth at the end of a given period. It follows the accounting formula: assets equal liabilities plus owners' equity. It shows the company's assets, and its short- and long-term debt.