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Balance Sheet
A Balance Sheet Is a statement of a firms assets,
liabilities and share capital on a particular date.
Assets Are things that a firm owns. They can be current or fixed.
Current Assets Are owned by the firm. They change from year to year. Examples include:
Anything receivable due Anything payable prepaid Bank (money in the bank) Cash (money in cash box..) Closing Stock Debtors (people that owe the firm money)
Fixed Assets Are owned by the firm. They last a long time. Examples include:
Buildings Equipment Fixtures & Fittings Machinery, motor vehicles Premises
Depreciation Is loss of value of an asset due to
wear and tear. Example: a new Ford Transit van
purchased for delivering goods costs €21,865 new, but will be worth less after one year
Net Book Value (NBV) Fixed Asset – Depreciation = NBV €10,000 - €500 = €9,500
Liability Is something a business owes
another firm. It can be current or long term.
Current Liability Is something that a firm owes. It is paid within one year. Examples include:
Accruals, payable due Anything receivable prepaid Bank Overdraft Creditors (people you owe money to) Dividends declared
Long Term Liabilities Is something a firm owes. It takes longer than one year to
pay off. Example: Long Term Loan.
Authorised Share Capital
Is the maximum number of shares a company can sell.
Issued Share Capital Is the actual number of shares a
company has sold
Capital Employed Is all the money that is invested in
the business. Includes:
Issued Share Capital Long Term Loans Reserves
Working Capital Current Assets – Current Liabilities. CA > CL = Liquid You have enough cash to run the
business
CA < CL = Overtrading You do not have enough cash to run the
business.
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