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Encyclopedia > Balance sheet
Corporate finance

Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Image File history File links Download high resolution version (1031x740, 688 KB)Midtown Manhattan looking North from the Empire State Building, 2005. ...


Working capital management

Cash conversion cycle
Return on capital
Economic value added
Just In Time
Economic order quantity
Discounts and allowances
Factoring (finance) Corporate finance is a specific area of finance dealing with the financial decisions corporations make and the tools as well as analysis used to make these decisions. ... Cash conversion cycle or CCC, also known as the asset conversion cycle, net operating cycle, working capital cycle or just cash cycle, is used in the financial analysis of a business. ... Return on capital, also known as Return On Invested Capital (ROIC) is defined as NOPLAT / Invested Capital usually expressed as a percentage. ... Economic Value Added (EVA) is an estimate of true economic profit after making corrective adjustments to GAAP accounting, including deducting the opportunity cost of equity capital. ... Just In Time (JIT) is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated costs. ... Economic order quantity is that level of inventory that minimises the total of inventory holding cost and ordering cost. ... Discounts and allowances are modifications to the basic price. ... This article is about finance. ...


Capital budgeting

Capital investment decisions
The investment decision
The financing decision
The process of determining which potential long-term projects are worth undertaking, by comparing their expected discounted cash flows with their internal rates of return. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ...


Sections

Managerial finance
Financial accounting
Management accounting
Mergers and acquisitions
Balance sheet analysis
Business plan
Corporate action Managerial Finance is that branch of finance that provide tools for a companys financial managers. ... Financial accountancy (or financial accounting) is the branch of accountancy concerned with the preparation of financial statements for decision makers, such as stockholders, suppliers, banks, government agencies, owners, and other stakeholders. ... Management accounting is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis in making informed business decisions that would allow them to be better equipped in their management and control functions. ... Acquisition redirects here. ... This is a summary article that covers many topics related to business plans - their content, how they are used, legal issues, and spoofs of business plans, among others. ... A corporate action is an event taken by a public company that has a direct financial impact on of its shareholders. ...


Finance series

Financial market
Financial market participants
Corporate finance
Personal finance
Public finance
Banks and Banking
Financial regulation The field of finance refers to the concepts of time, money and risk and how they are interelated. ... This article does not cite any references or sources. ... There are two basic financial market participant catagories, Investor vs. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... -1... This article does not cite any references or sources. ... For other uses, see Bank (disambiguation). ... Financial supervision is government supervision of financial institutions by regulators. ...


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In financial accounting, a balance sheet or statement of financial position is a summary of a person's or organization's assets, liabilities and ownership equity on a specific date, such as the end of its financial year. A balance sheet is often described as a snapshot of a company's financial condition.[1] Of the four basic financial statements, the balance sheet is the only statement which applies to a single point in time. The field of accounting that serves external decision makers, such as stockholders, suppliers, banks and government agencies See also: Management accounting field of accounting concerned with external users of a companys financial information. ... This article is about the business definition. ... In the most general sense, a liability is anything that is a hinderance, or puts one at a disadvantage. ... At the start of a business, owners put some funding into the business to finance assets. ... A fiscal year or financial year is a 12-month period used for calculating annual (yearly) financial reports in businesses and other organizations. ... Historical financial statement Financial statements (or financial reports) are formal records of a business financial activities. ...


A company balance sheet has three parts: assets, liabilities and shareholders' equity. The main categories of assets are usually listed first and are followed by the liabilities. The difference between the assets and the liabilities is known as the net assets or the net worth of the company. According to the accounting equation, net worth must equal assets minus liabilities.[2] This article or section is in need of attention from an expert on the subject. ... The net assets is sometimes the same as the net worth, or shareholders equity, assets minus liabilities. ... Net worth (sometimes net assets) is the total assets minus total liabilities of an individual or company. ... The basic accounting equation is the foundation for the double-entry book-keeping system. ...


Records of the values of each account or line in the balance sheet are usually maintained using a system of accounting known as the double-entry bookkeeping system. In accountancy, an account is a label used for recording and reporting a quantity of almost anything. ... In accountancy, the double-entry bookkeeping (or double-entry accounting) system is the basis of the standard system used by businesses and other organizations to record financial transactions. ...


A business operating entirely in cash can measure its profits by withdrawing the entire bank balance at the end of the period, plus any cash in hand. However, real businesses are not paid immediately; they build up inventories of goods and they acquire buildings and equipment. In other words: businesses have assets and so they can not, even if they want to, immediately turn these into cash at the end of each period. Real businesses owe money to suppliers and to tax authorities, and the proprietors do not withdraw all their original capital and profits at the end of each period. In other words businesses also have liabilities. This article is about the business definition. ... In the most general sense, a liability is anything that is a hindrance, or puts individuals at a disadvantage. ...

Contents

Types of balance sheets

A balance sheet summarizes an organization or individual's asset, equity and liabilities at a specific point in time. Individuals and small businesses tend to have simple balance sheets.[3][dead link] Larger businesses tend to have more complex balance sheets, and these are presented in the organization's annual report.[4] Large businesses also may prepare balance sheets for segments of their businesses.[5] A balance sheet is often presented alongside one for a different point in time (typically the previous year) for comparison.[6][7] An annual report is a document which a company presents at its Annual General Meeting for approval by its shareholders. ...


Personal balance sheet

A personal balance sheet lists current assets such as cash in checking accounts and savings accounts, long-term assets such as common stock and real estate, current liabilities such as loan debt and mortgage debt due or overdue, and long-term liabilities such as mortgage and other loan debt. Securities and real estate values are listed at market value rather than at historical cost or cost basis. Personal net worth is the difference between an individual's total assets and total liabilities. [8] Includes demand deposits, ATS, NOW, and other checkable deposits. ... The passbook is the traditional document to keep track of earnings in a savings account Savings accounts are accounts maintained by commercial banks, savings and loan associations, credit unions, and mutual savings banks that pay interest but can not be used directly as money (by, for example, writing a cheque). ... Common stock, also referred to as common shares, are, as the name implies, the most usual and commonly held form of stock in a corporation. ... Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ... For other uses, see Loan (disambiguation). ... This article is about the legal mechanism used to secure property in favor of a creditor. ... Market capitalization, often abbreviated to market cap, mkt. ... In accounting terminology, historical cost describes the original cost of an asset at the time of purchase or payment as opposed to its market value (saleable value, replacement value or value in present or alternative use). ... Cost basis, or basis as used in United States tax law, is the original cost of property adjusted for factors such as depreciation. ... Net worth (sometimes net assets) is the total assets minus total liabilities of an individual or company. ...


US Small business balance sheet

Sample Small Business Balance Sheet[9]
Assets Liabilities and Owners' Equity
Cash $ 6,600 Liabilities
Accounts Receivable 6,200 Notes Payable $30,000
Accounts Payable
Total liabilities $30,000
Tools and equipment 25,000 Owners' equity
Capital Stock $ 7,000
Retained Earnings 800
Total owners' equity $7,800
Total $37,800 Total $37,800

A small business balance sheet lists current assets such as cash, accounts receivable, and inventory, fixed assets such as land, buildings, and equipment, intangible assets such as patents, and liabilities such as accounts payable, accrued expenses, and long-term debt. Contingent liabilities such as warranties are noted in the footnotes to the balance sheet. The small business's equity is the difference between total assets and total liabilities. [10]
Accounts receivable is one of a series of accounting transactions dealing with the billing of customers who owe money to a person, company or organization for goods and services that have been provided to the customer. ... Inventory is a list of goods and materials, or those goods and materials themselves, held available in stock by a business. ... Intangible assets are defined as those non-monetary assets that cannot be seen, touched or physically measured and which are created through time and/or effort. ... For other uses, see Patent (disambiguation). ... Accounts payable is a file or account that contains money that a person or company owes to suppliers, but hasnt paid yet. ... Please wikify (format) this article or section as suggested in the Guide to layout and the Manual of Style. ... In business law, a warranty is a promise that something sold is as factually stated or legally implied by the seller. ...


Corporate balance sheet structure

Guidelines for corporate balance sheets are given by the International Accounting Standards Committee and numerous country-specific organizations. International Accounting Standards Committee was founded in June 1973 in London and restructured to the International Accounting Standards Board (IASB) on April 1, 2001. ...


Balance sheet account names and usage depend on the organization's country and the type of organization. Government organizations do not generally follow standards established for individuals or businesses.[11][12][13][14][15]


If applicable to the business, summary values for the following items should be included on the balance sheet:[16]


Assets

Current assets In accounting, a current asset is an asset on the balance sheet which is expected to be sold or otherwise used up in the near future, usually within one year, or one business cycle - whichever is longer. ...

  1. inventories
  2. accounts receivable
  3. cash and cash equivalents

Long-term assets Inventory is a list of goods and materials, or those goods and materials themselves, held available in stock by a business. ... Accounts receivable is one of a series of accounting transactions dealing with the billing of customers who owe money to a person, company or organization for goods and services that have been provided to the customer. ... Cash and cash equivalents are the most liquid asset found within the asset portion of a companys balance sheet. ... Long-term assets are those assets usually in service over one year such as buildings, equipment, etc. ...

  1. property, plant and equipment
  2. investment property, such as real estate held for investment purposes
  3. intangible assets
  4. financial assets (excluding investments accounted for using the equity method, accounts receivables, and cash and cash equivalents)
  5. investments accounted for using the equity method
  6. biological assets, which are living plants or animals. Bearer biological assets are plants or animals which bear agricultural produce for harvest, such as apple trees grown to produce apples and sheep raised to produce wool.[17]

Fixed asset, also known as property, plant, and equipment (PP&E), is a term used in accountancy for assets and property which cannot easily be converted into cash. ... Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ... Intangible assets are defined as those non-monetary assets that cannot be seen, touched or physically measured and which are created through time and/or effort. ...

Liabilities

  1. accounts payable
  2. provisions for warranties or court decisions
  3. financial liabilities (excluding provisions and accounts payable), such as promissory notes and corporate bonds
  4. liabilities and assets for current tax
  5. deferred tax liabilities and deferred tax assets
  6. minority interest in equity
  7. issued capital and reserves attributable to equity holders of the parent company

Accounts payable is a file or account that contains money that a person or company owes to suppliers, but hasnt paid yet. ... In accountancy, Provisions are liabilities similar to accruals, however the amount or probability of occurrence are not known. ... A promissory note is a contract detailing the terms of a promise by one party (the maker) to pay a sum of money to the other (the payee). ... A corporate bond is a bond issued by a corporation. ... Taxes redirects here. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Deferred tax is an accounting term, meaning future tax liability or... Minority interest in business is an accounting concept that refers to ownership of a company that is less than 50% of outstanding shares. ... In accounting, the word reserve is most commonly used to describe any part of shareholders equity, except for basic share capital. ... A holding company is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors. ...

Equity

The net assets shown by the balance sheet equals the third part of the balance sheet, which is known as the shareholders' equity. Formally, shareholders' equity is part of the company's liabilities: they are funds "owing" to shareholders (after payment of all other liabilities); usually, however, "liabilities" is used in the more restrictive sense of liabilities excluding shareholders' equity. The balance of assets and liabilities (including shareholders' equity) is not a coincidence. Records of the values of each account in the balance sheet are maintained using a system of accounting known as double-entry bookkeeping. In this sense, shareholders' equity by construction must equal assets minus liabilities, and are a residual. This article or section is in need of attention from an expert on the subject. ... Double-entry book-keeping is the standard accounting practice for recording financial transactions. ... In general, a residual is a positive or negative numeric difference between two numbers. ...

  1. numbers of shares authorised, issued and fully paid, and issued but not fully paid
  2. par value of shares
  3. reconciliation of shares outstanding at the beginning and the end of the period
  4. description of rights, preferences, and restrictions of shares
  5. treasury shares, including shares held by subsidiaries and associates
  6. shares reserved for issuance under options and contracts
  7. a description of the nature and purpose of each reserve within owners' equity

In financial markets, a share is a unit of account for various financial instruments including stocks, mutual funds, limited partnerships, and REITs. ... Par value has several meanings depending on the context, whether used in the equities market, or in the bond markets, and partially also dependent on where in the world the par value term is used. ... A treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market (open market including insiders holdings). ... A subsidiary, in business, is an entity that is controlled by another entity. ... This article is about options traded in financial markets. ... A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. ...

Sample balance sheet structure

The following balance sheet structure is just an example. It does not show all possible kinds of assets, equity and liabilities, but it shows the most usual ones. Because it shows goodwill, it could be a consolidated balance sheet. Monetary values are not shown, summary (total) rows are missing as well. Look up Goodwill in Wiktionary, the free dictionary. ... Consolidated accounts are financial statements that factors the holding companys subsidiaries into its aggregated accounting figure. ...

 Balance Sheet of XYZ, Ltd. as of 31 December 2006 ASSETS Current Assets Cash and cash equivalents Accounts receivable (debtors) Inventories Prepaid Expenses Investments held for trading Other current assets Fixed Assets (Non-Current Assets) Property, plant and equipment Less : Accumulated Depreciation Goodwill Other intangible fixed assets Investments in associates Deferred tax assets LIABILITIES and EQUITY Creditors: amounts falling due within one year (Current Liabilities) Accounts payable Current income tax liabilities Current portion of bank loans payable Short-term provisions Other current liabilities Creditors: amounts falling due after more than one year (Long-Term Liabilities) Bank loans Issued debt securities Deferred tax liability Provisions Minority interest Equity Share capital Capital reserves Revaluation reserve Translation reserve Retained profit 

is the 365th day of the year (366th in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ... In accounting, a current asset is an asset on the balance sheet which is expected to be sold or otherwise used up in the near future, usually within one year, or one business cycle - whichever is longer. ... Cash and cash equivalents are the most liquid asset found within the asset portion of a companys balance sheet. ... Accounts receivable is one of a series of accounting transactions dealing with the billing of customers who owe money to a person, company or organization for goods and services that have been provided to the customer. ... Inventory is a list of goods and materials, or those goods and materials themselves, held available in stock by a business. ... Deferred, in accounting, is any account where the asset or liability is not realized until a future date, e. ... Declining-balance depreciation of a $50,000 asset with $6,500 salvage value over 20 years. ... Look up Goodwill in Wiktionary, the free dictionary. ... Intangible assets are defined as those non-monetary assets that cannot be seen, touched or physically measured and which are created through time and/or effort. ... An associate company (or associate) in accounting and business valuation is a company in which another company owns a significant portion of voting shares, usually 20–50%. In this case, an owner does not consolidate associates financial statements. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Deferred tax is an accounting term, meaning future tax liability or... Accounts payable is a file or account that contains money that a person or company owes to suppliers, but hasnt paid yet. ... In accountancy, Provisions are liabilities similar to accruals, however the amount or probability of occurrence are not known. ... For other uses, see Loan (disambiguation). ... For security (collateral), the legal right given to a creditor by a borrower, see security interest A security is a fungible, negotiable instrument representing financial value. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Deferred tax is an accounting term, meaning future tax liability or... In accountancy, Provisions are liabilities similar to accruals, however the amount or probability of occurrence are not known. ... Minority interest in business is an accounting concept that refers to ownership of a company that is less than 50% of outstanding shares. ... Share capital or issued capital (UK English) or capital stock (US English)[1] refers to the portion of a companys equity that has been obtained (or will be obtained) by trading stock to a shareholder for cash or an equivalent item of capital value. ... In accounting, the word reserve is most commonly used to describe any part of shareholders equity, except for basic share capital. ... In accounting, the word reserve is most commonly used to describe any part of shareholders equity, except for basic share capital. ... In accounting, the word reserve is most commonly used to describe any part of shareholders equity, except for basic share capital. ...

See also

Off balance sheet usually means an asset or debt or financing activity not on the companys balance sheet. ... Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. ... Minority interest in business is an accounting concept that refers to ownership of a company that is less than 50% of outstanding shares. ... An Income Statement, also called a Profit and Loss Statement (P&L), is a financial statement for companies that indicates how Revenue (money received from the sale of products and services before expenses are taken out, also known as the top line) is transformed into net income (the result after...

References

  1. ^ Williams, Jan R.; Susan F. Haka, Mark S. Bettner, Joseph V. Carcello (2008). Financial & Managerial Accounting. McGraw-Hill Irwin, p. 40. ISBN 9780072996500. 
  2. ^ Williams, p.50
  3. ^ US Small Business Administration sample spreadsheet for a small business
  4. ^ Microsoft Corporation balance sheet, June 30, 2004
  5. ^ International Business Machines "Global Financing" balance sheet comparing 2003 to 2004
  6. ^ Balance sheet comparing two year-end balance sheets
  7. ^ Balance sheet comparing monthly balances
  8. ^ Personal balance sheet structure
  9. ^ Williams, p. 50.
  10. ^ Small Business Administration
  11. ^ University of Calgary (Canada) Financial Services balance sheet accounts
  12. ^ University of Victoria (Canada) balance sheet accounts
  13. ^ University of Minnesota (USA) balance sheet accounts
  14. ^ State of Alabama (USA) balance sheet accounts
  15. ^ New York State (USA) public utilities balance sheet accounts
  16. ^ "Presentation of Financial Statements" International Accounting Standards Board. Accessed 24 June 2007.
  17. ^ Epstein, Barry J.; Eva K. Jermakowicz (2007). Interpretation and Application of International Financial Reporting Standards. John Wiley & Sons, p. 931.. ISBN 9780471798231. 
is the 175th day of the year (176th in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) was a common year starting on Monday of the Gregorian calendar in the 21st century. ... John Wiley & Sons, Inc. ...

  Results from FactBites:
 
Balance Sheet - AccountingCrosswords.com (349 words)
The balance sheet is one of the main financial statements.
The balance sheet reports the amount of assets, liabilities, and stockholders' (or owner's) equity at a specific moment (or point in time).
The balance sheet usually reports assets by classifications such as current assets, investments, property, plant and equipment, and other assets.
Making Your Balance Sheet Work for You - June 2001 - Family Practice Management (2869 words)
A balance sheet shows what your practice owns (in accounting terms, your assets), what it owes (your liabilities) and what you have put in it based on your original costs (your net equity, or fund balances if your practice is a nonprofit organization).
A balance sheet shows the assets of a practice and the extent to which those assets were financed with borrowed money and with the owners' money.
The fundamental equation embodied by the balance sheet is this:
  More results at FactBites »

 
 

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