Profit And Loss And Balance Sheets Page 5
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26ANALYSING PERFORMANCE
- THE BALANCE SHEET
The balance sheet for your business gives you a 'snapshot'
view of what the business is worth, its assets and liabilities, at
one particular moment in time. Usually this is at the end of the
financial year and allows you to compare the situation of the
business from one year to the next but you can also draw up
quarterly or even monthly balance sheets. The balance sheet
should be produced once your trading profit and loss account
has been drawn up.
The Balance Sheet
A balance sheet is concerned with 3 things:
.
Assets
A balance sheet shows:
.
Liabilities
.
.
The financial situation of the
Capital
organisation at a particular time
It will include:
.
The change from one period
(usually a year) to the next
1 : Assets
.
All assets must be given a value.
How much money is in the business
They include:
.
The balance of assets Vs liabilities
Fixed Assets :
Land, property, plant,
and fixed assets Vs liquid assets
machinery, fixtures and fittings,
equipment, vehicles
Current Assets :
Stock, work in progress,
unpaid invoices (debtors), cash
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