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    Balance Sheet

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    deepakpareek143
    A financial statement summarizes the financial health of a company. It includes a profit and loss statement, balance sheet, and cash flow statement. The profit and loss statement shows revenues and expenses to determine profit or loss. The balance sheet outlines assets, liabilities, and equity on a given date. Assets are things owned, liabilities are debts owed, and equity is the owner's investment and retained earnings. Current assets and liabilities are due within a year, while non-current are longer term. The financial statement provides information to investors and managers about the company's performance and financial position.

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    Balance Sheet

    Uploaded by

    deepakpareek143
    51 views23 pages
    A financial statement summarizes the financial health of a company. It includes a profit and loss statement, balance sheet, and cash flow statement. The profit and loss statement shows revenues and expenses to determine profit or loss. The balance sheet outlines assets, liabilities, and equity on a given date. Assets are things owned, liabilities are debts owed, and equity is the owner's investment and retained earnings. Current assets and liabilities are due within a year, while non-current are longer term. The financial statement provides information to investors and managers about the company's performance and financial position.

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    A financial statement summarizes the financial health of a company. It includes a profit and loss statement, balance sheet, and cash flow statement. The profit and loss statement shows revenues and expenses to determine profit or loss. The balance sheet outlines assets, liabilities, and equity on a given date. Assets are things owned, liabilities are debts owed, and equity is the owner's investment and retained earnings. Current assets and liabilities are due within a year, while non-current are longer term. The financial statement provides information to investors and managers about the company's performance and financial position.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    51 views23 pages

    Balance Sheet

    Uploaded by

    deepakpareek143
    A financial statement summarizes the financial health of a company. It includes a profit and loss statement, balance sheet, and cash flow statement. The profit and loss statement shows revenues and expenses to determine profit or loss. The balance sheet outlines assets, liabilities, and equity on a given date. Assets are things owned, liabilities are debts owed, and equity is the owner's investment and retained earnings. Current assets and liabilities are due within a year, while non-current are longer term. The financial statement provides information to investors and managers about the company's performance and financial position.

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    FINANCIAL STATEMENTS

    What is a Financial Statement?


     A financial statement is a quantitative way
    of showing how a company is doing.
     Three different ways of representing the
    financial state of a company:
    1. Cash Management –the trading account
    2. Profitability - the profit and loss statement
    3. Assets versus Liabilities- the balance sheet
    P&L account
    INTRODUCTION
    P&L account is an account which is prepared to
    calculate the final profit or loss of a business or firm

     All operating expenses and other non operating


    income and expenditure and losses are charged to
    p&l a/c to find out the net profit.
    Operating expenses
    Operating expenses such as office and
    administration expenses ,selling and
    distribution and financial charges.
    Non Operating income
    non operating income such as dividends
    received ,interest received , discount
    received etc.
    Objective of P & L a/c
    Showwhether a business has made a
    PROFIT or LOSS over a financial year

    Describe how the profit or loss arose


    Importance of P & L a/c
    It provide accounting date

    Information about net result

    Future Profit Planning

    Control over expenses


    Format of P & L account
    Date Particular Amount Date Particular Amount
    (Dr) (Cr)
    Explanation of debit side items
    All office & administration expenses

    Selling and distribution expenses

    Financial charges
    Explanation of credit side items
    Gross profit or gross loss

    Non operating income


    BALANCESHEET

    A Balance Sheet Or Statement Of Financial Position Is A


    Summary Of The Financial Balances Of A Sole Proprietor,
    A Business Partnership Or A Company ,Assets , Liabilities
    And Ownership Equity Are Listed As Of A Specific Date,
    Such As The End Of Its Financial Year.
    The balance sheet gives investors an idea
    of what the company owns and owes as
    well as the amount invested by the
    shareholders.

    “Snapshot of a company's financial


    condition” 

    The balance sheet follows the formula


    assets = liabilities + shareholders' equity.
    The Balance Sheet's Main Three

     ASSETS

     LIABILITY

     EQUITY
    ASSETS

    An asset can be sold to generate


    additional cash.
    Used to produce other goods

    There are two main types of assets:

    • Current Assets
    • Non-current Assets.
    Current assets:

     Cash
     Inventories
     Accounts Receivables
    Non-current assets:

     Property
     Plant
     Equipment
    Liabilities
    An obligation or debt owed to someone
    else.
    An outsider’s claim against one or
    more assets of the business.
    Current Liabilities
     Accounts payable.
     Principal and accumulated interest on
    short-term loans or notes payable
    (operating loans).
     Principal payments on long-term loans
    due within the next year:
     Machinery, land.
     Accrued expenses:
     Accumulated interest, accrued property
    taxes, etc.
    Noncurrent Liabilities

    All obligations that don’t have to be


    paid in full within the next year.

    ◦ The remaining balance on long-term debt.


    Equity

    Equity represents what shareholders own,


    so it is often called shareholder's equity.

    Equity = Total Assets – Total Liabilities


    Types of balance sheet

    Personal Balance Sheet

     Small Business Balance Sheet

    Public Business Entities Balance Sheet


    Uses Of Balance Sheet
    It is helpful in ascertaining the financial
    position of the business by showing assets
    and liabilities of the concern on a specific
    date.
    It discloses the solvency of business by
    showing how much assets are available
    for payment of liabilities.

     
    It also disclose the proprietary interest of
    owner.
    It helps in calculation of various ratios which
    help in better management of business.
    It helps in comparison of assets and
    liabilities of business on two dates to
    ascertain the progress being made by
    business.
     
    THANKYOU

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