Balance Sheet Format Company Balance Sheet Excel Format 4 Fabulous Florida Keys
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It depicts the organizations assets liabilities and owners equity. The balance sheet equation is as followed ssets = Liabilities + Owners Equity. The two sides of the equation balance out hence why the statement is called the balance sheet. Assets are the economic benefits that will be acquired and controlled by an organization as a result of past transactions. Assets are tangible; they include cash accounts receivable inventory and equipment. Assets can be broken down into current and long term. Current assets such as cash and accounts receivable are assets that are or can be transformed into cash or benefit the company within one year.
With balance sheet data you can evaluate important indicators concerning your business - such as your ability to meet financial obligations (current ratio days cash on hand) and how effectively you use credit to finance your operations (debt ratio debt to equity ratio). Although the balance sheet represents a given moment suspended in time it can be prepared to include information from the previous accounting period for comparative purposes. This will permit you to evaluate how your business is performing over time. Compare the current reporting period with previous ones using a percent change analysis. Do you have more assets? Have you accrued more debt? Invested in equipment and facilities? Are your pressing financial obligations (current liabilities) under control? Is the amount that payers owe you growing? Calculating financial ratios and trends can help you identify potential financial problems that may not be obvious.
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Current liabilities are those that will be paid within one year these include accounts payable notes payable current maturities of long-term debt and payroll taxes. Long-term debt is that which is paid off over an extended period of time. Owner s equity also called net assets is the right of ownership the owners of the organization have after subtracting liabilities. Some examples of owner s equity include common stock additional paid in capital and retained earnings. Common stock is issued as an investment in the business. For example in corporations stockholders are ultimately the owners they claim all assets after liabilities and preferred stock claims are satisfied. Additional paid in capital is defined as the leftover amount paid by the investor over the stated value of the shares sold. Finally the retained earnings are the net income that is not be distributed as dividends to owners or an organization.