balance sheets

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  • Created by: Leah
  • Created on: 07-02-13 18:26
what does a balance sheet show?
where the business got the money from and what it does with it
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what are fixed assets? give 3 examples
assets that will last more than one year- machinery, vehicles, premises
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what are current assets? give 3 examples
assets that only last a few months- stock, debtors, cash
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what are current liabilites? give 3 examples
bills that the firm have to pay soon- tax, creditors, dividends to shareholders
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how do you work out net current assets?(working capital)
current assets-current liablities
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how do you work out net assets?
net current assets+fixed assets= net assets
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what does the second half of the balance sheet show?
where did all the money come from to create the net worth of the business.
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what is share capital?
the money put into the business when shares were originally issued.
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what are retained profits and reserves?
shows all the profit that the firm has made over the years that it has decided to retain instead of paying in dividends.
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what can a balance sheet show to stakeholders?
the financial health of a business
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how can net assets show that a business is finacially healthy?
A business whose net assets are growing each year is probably heathy,because its increasing the value of its fixed assets and its cash reserves.
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what does it mean if a business has low or negative net assets?
it is unhealthy financially. It might be borrowing money to finance short term assets such as unsold stock or debtors who dont pay their bills.
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Other cards in this set

Card 2

Front

what are fixed assets? give 3 examples

Back

assets that will last more than one year- machinery, vehicles, premises

Card 3

Front

what are current assets? give 3 examples

Back

Preview of the front of card 3

Card 4

Front

what are current liabilites? give 3 examples

Back

Preview of the front of card 4

Card 5

Front

how do you work out net current assets?(working capital)

Back

Preview of the front of card 5
View more cards

Comments

davidsalter

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An excellent set of flash cards that cover the main aspects of the balance sheet. Can be used for final revision or testing yourself and others.

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