A company’s financial standing is reflected in its balance sheet, which reveals the exact status of the company in the current market conditions. This important document is also referred to as a ‘statement of financial position’ and it summarises many of the important details concerning a company.
If you are planning to invest in a small business or become a shareholder, then it is very important you understand the basics of how to read a balance sheet, because it is this report which contains the vital statistics and the precise details of the financial position of a company. Read more
Whatever your reasons for looking at a business’ balance sheet, whether you are planning to buy it, invest in it or simply buy a few shares, there is little point in having this incredibly important document in front of you, if don’t have the first idea what you are looking at.
A firm’s balance sheet is like a snap shot of its fiscal status, and will tell you everything you need to know about its current financial health; it contains information on all assets, debts, investments and the net worth of a company and so can provide a far better insight as to how it has been performing than a mere profit report can, pretty useful if you are planning to part with your hard earned cash.
A balance sheet will list a firm’s assets, liabilities and the shareholder’s equity and is based on the simple equation that a firm’s net worth or ‘equity’ must equal its assets minus its liabilities.
The assets on a balance sheet will typically be split into two categories, namely ‘current’ assets and ‘fixed’ assets or less commonly ‘financial’ and ‘non-financial’ assets. Read more
Financial Statements are used to find the financial health of a company or of an individual. Financial statements for companies and firms are usually prepared by Certified Public Accountants (CPAs). It does not hurt to understand what goes into the work for a financial statement to give you a good idea of your company’s financial health. There are four basic statements to be considered, Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of cash flow.
The Balance Sheet also referred to as statement of financial position or condition, reports on Assets (anything of value), liabilities (anything owed to others) and Owner’s equity. Read more