Balance sheet - a document the most simple, built in such a way that it is understandable to the general public.In fact, you do not even understand the difference between debit and credit, to get the balance sheet all the necessary information.Therefore, fear and even more so it should not be ignored.
This balance sheet provides the basis for making important management decisions, because it is an open book, you can see all the advantages and disadvantages of a particular company.On the basis of the balance sheet is calculated dozens of the most important economic indicators.The value of the balance sheet can not be overstated.So take it in hand now and start learning.
first thing that catches your eye - the balance of this division into two major parts: assets and liabilities.This division has a very deep meaning.Imagine it like this: asset reflects all that today owns the company (this may be money, equipment, raw materials, finished products, etc.) and liabilities show how the company was able to purchase these assets.In total there are two ways to purchase: at the expense of shareholders and borrowed funds.According to this logic, all liabilities are divided into equity and debt.As you can see, it's pretty simple, and now turn to the right sections of the balance sheet.
total balance sheet is divided into five sections, two of which relate to the assets and liabilities to the three.The first section displays the current assets.Slightly simplifying, we can say that it refers to all that the company will use for a year or more.This, of course, production equipment, intangible assets (different kinds of licenses and patents), construction in progress (or rather invest in it), etc.This section shows the long-term prospects of the company to make a profit.
second section, current assets, it - cash, goods in stock, raw materials, as well as all sorts of debts of economic entities to the company, which to repay within a year.This section provides information on how things are going in the company currently, and whether it can cope with all of its current liabilities.
third section, which includes a balance sheet, capital - it is, as already mentioned, the shareholders' equity.The proportion of shareholders may be in the form of cash investments (contribution to the statutory fund, the purchase of shares, etc.), and in the form of retained earnings, left to work for the needs of business.This section is especially interesting for investors, as it actually reflects the economic effect (profit) of the enterprise, and return on investment.
Completing balance sheet debt divided by long-term (over one year) - the fourth section, and short-term - the fifth section.This section allows you to determine how the company "mired in debt" and whether it is time to pay off all its commitments.Usually, these sections are focusing banks and financial institutions.
Thus, the balance sheet structure and its contents do not constitute a big deal.You do not teach accounting entries to determine the economic efficiency of the enterprise, its liquidity, leverage, return on investment and other key indicators.In fact, experienced leader and lacking a cursory glance at the balance to get the answer to all his questions.After some training is required to get at you.
