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Balance Sheet

Balance Sheet. A Balance Sheet. Is a statement of a firms assets, liabilities and share capital on a particular date. Assets. Are things that a firm owns. They can be current or fixed. Current Assets. Are owned by the firm. They change from year to year. Examples include:

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Balance Sheet

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  1. Balance Sheet

  2. A Balance Sheet • Is a statement of a firms assets, liabilities and share capital on a particular date.

  3. Assets • Are things that a firm owns. • They can be current or fixed.

  4. Current Assets • Are owned by the firm. • They change from year to year. • Examples include: • Anything receivable due • Anything payable prepaid • Bank (money in the bank) • Cash (money in cash box..) • Closing Stock • Debtors (people that owe the firm money)

  5. Fixed Assets • Are owned by the firm. • They last a long time. • Examples include: • Buildings • Equipment • Fixtures & Fittings • Machinery, motor vehicles • Premises

  6. Depreciation • Is loss of value of an asset due to wear and tear. • Example: a new Ford Transit van purchased for delivering goods costs €21,865 new, but will be worth less after one year

  7. Net Book Value (NBV) • Fixed Asset – Depreciation = NBV • €10,000 - €500 = €9,500

  8. Liability • Is something a business owes another firm. • It can be current or long term.

  9. Current Liability • Is something that a firm owes. • It is paid within one year. • Examples include: • Accruals, payable due • Anything receivable prepaid • Bank Overdraft • Creditors (people you owe money to) • Dividends declared

  10. Long Term Liabilities • Is something a firm owes. • It takes longer than one year to pay off. • Example: Long Term Loan.

  11. Authorised Share Capital • Is the maximum number of shares a company can sell.

  12. Issued Share Capital • Is the actual number of shares a company has sold

  13. Capital Employed • Is all the money that is invested in the business. • Includes: • Issued Share Capital • Long Term Loans • Reserves

  14. Working Capital • Current Assets – Current Liabilities. • CA > CL =Liquid • You have enough cash to run the business • CA < CL = Overtrading • You do not have enough cash to run the business.

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