What A Balance Sheet Tells You

What A Balance Sheet Tells You

What a balance sheet tells you

A COMPANY'S financial affairs are in process of constant change, and to record the financial position resulting from every

transaction would require a concurrently moving picture. To ascertain the financial position at any particular point, the scene has to be halted. The balance sheet is the record of this picture as arrested on the last day of the company's financial year, and thozus the company's actual financial position on that day.

The scene is set by listing the Liabilities on the left-band side and the Assets on the right-hand side.

CONSOLIDATED

Liabilities

(PERMANENT

LIABILITIES)

SHARE CAPITAL Authorised Issued

Preference

Ordinary

RESERVES

CAPITAL RESERVES Share premium account Capital redemption reserve fund

Redemption of goodwill Deserve

Additional depreciation reserve

General reserve

REVENUE RESERVES General reserve

Working capital reserve Contingencies reserve Dividend equalisation reserve

Profit and loss account balance

-


What next? Ascertaining Equity Earnings



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