1-Non current assets
2-Current assets
3-Current liabilities
4-Net current assets
5-Non current liabilities
6-Net assets
7-Financed by
8-Total equity
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Non current assets and examples
Non currents assets are assets owed by the business that are useful to the business for longer than a year such as land vehicles building furnishing and machinery
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Current assets
Current assets are assets owned by the business that last less than a year and such as cash stock and Receivables/debtors raw materials work in progress and cash equivalents
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Current liabilities
Things that a business will need to pay out within 12 months such as tax payables creditors and bank overdraft.
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Net current assets and formula
Net current assets is the working capital-the money a business has for the day to day running of the business. The formula is total current assets - total current liabilities
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Non-current liabilities
known as long term liabilities and are paid back after 12 months such as mortgages bank loans and bonds payable.
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Net Assets Formula
non-currents + net current assets -non current liabilities
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Financed by
How the company is financed i.e mortgages, share capital, retained profit and long term loans
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Total Equity
Should always be the same as the net assets.
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Why must net assets and total equity be the same?
Because for every single penny that has been raised to finance the business it must have been spent in some way in the business.
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Other cards in this set
Card 2
Front
Non current assets and examples
Back
Non currents assets are assets owed by the business that are useful to the business for longer than a year such as land vehicles building furnishing and machinery
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