Balance Sheet

A Balance sheet provides a snap shot of the assets and liabilities of a
business at a point of time.

Balance sheet for XYZ plc as at 31st March 2003

















Fixed assets are:

Assets that provide a benefit for the business in the long-term (normally for
at least a year), e.g. buildings and machinery

Assets that the business intends to keep

Current assets

Current assets are assets that will be used up or sold in the next year + the
cash balances kept in the business. The main categories are:

Stock – finished goods, work in progress and raw materials .

Debtors – people who owe the business money

Cash – in the bank and in the cash box.


Current liabilities

Current liabilities are what the business owes in the short run ie within the
next year.. The main categories are:

Creditors – money owed by the business in the short term

Bank overdraft – amounts due within the next 12 months.

NOTE: The total of
current assets minus current liabilities is known as
working capital
. This is amount of money available for the day to day
running of the business.

Long-term liabilities

Long term liabilities are the monies the business has borrowed for a period of
more than a year. The main ones are:-

-
Bank loans

- Share capital is the money invested in the business by the owners.

-
Profit and loss reserves are the profits due to the owners that have not
already been paid out in dividends.

- Shareholder funds – the money invested by shareholders through share
capital and reserves added together.