Balance sheet

balance sheet

“snapshot of the value of the firm at a point in time. This is usually the last day of the financial year.

Asset

 items of monetary value that are owned by a business, such as cash, stocks and property. To purchase assets, firms need different sources of finance.  

Non-current asset

any assets used for business operation. Likely to be used for more than 12 months

Current asset

assets are likely to be converted into cash within 12 months or less. Three main types: cash, debtors, stocks

Liabilities

Legal obligations of a business to repay its lenders or suppliers at a later date. Amount of money owed by the business.

Current liabilities

debts that must be settled within one year of the balance sheet date, overdraft, short-term loans, trade creditors

Non-current liabilites

debts are due to be repaid after twelve months of the balance sheet date. banks loasn, mortgages

Equity

the value of the business belonging to the owners, shared capital, retained earnings.