Balance sheet Business Studies
What is a balance sheet? <ul><li>The balance sheet is a financial statement. </li></ul><ul><li>It is a list of all the  as...
The balance sheet is a financial “snap shot” <ul><li>It lists the  assets  and  liabilities  of the business on a  particu...
FIXED ASSETS <ul><li>These are assets that the business owns.  </li></ul><ul><li>They will keep these assets for several y...
CURRENT ASSETS <ul><li>Current assets mean that the assets will  not  stay in the business for long. </li></ul><ul><li>Exa...
CURRENT LIABILITIES <ul><li>The amount of money that a business owes other people and other businesses (creditors). </li><...
NET CURRENT ASSETS <ul><li>ASSETS  minus   LIABILITIES  </li></ul><ul><li>(current & fixed)  (current) </li></ul>
LONG TERM LIABILITIES <ul><li>These are debts need paying back in the future (one year +) </li></ul><ul><li>Examples: Loan...
NET ASSETS  <ul><li>ASSETS  minus   LIABILITIES  </li></ul><ul><li>(current & fixed)  (Current & fixed) </li></ul>
The second section of the balance sheet <ul><li>This looks at where the money which was used to buy the long term and shor...
The start up of the business is funded by: <ul><li>CAPITAL & RESERVES </li></ul><ul><li>SHARE CAPITAL – The amount of mone...
<ul><li>NET ASSETS SHOULD  EQUAL  THE AMOUNT OF MONEY THAT HAS BEEN INVESTED IN THE BUSINESS. </li></ul><ul><li>BOTH PARTS...
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Balance Sheet

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Balance Sheet

  1. 1. Balance sheet Business Studies
  2. 2. What is a balance sheet? <ul><li>The balance sheet is a financial statement. </li></ul><ul><li>It is a list of all the assets (what the business owns) and all the liabilities (what the business owes) of a business. </li></ul>
  3. 3. The balance sheet is a financial “snap shot” <ul><li>It lists the assets and liabilities of the business on a particular day . </li></ul>
  4. 4. FIXED ASSETS <ul><li>These are assets that the business owns. </li></ul><ul><li>They will keep these assets for several years so they are fixed . </li></ul><ul><li>Examples: Buildings , Machinery, Vehicles </li></ul>
  5. 5. CURRENT ASSETS <ul><li>Current assets mean that the assets will not stay in the business for long. </li></ul><ul><li>Examples: materials, debtors, money in the bank, petty cash </li></ul>
  6. 6. CURRENT LIABILITIES <ul><li>The amount of money that a business owes other people and other businesses (creditors). </li></ul><ul><li>Liabilities are “current” because the amount owed can vary from one day to the next. </li></ul><ul><li>They must be paid back within a year. </li></ul>
  7. 7. NET CURRENT ASSETS <ul><li>ASSETS minus LIABILITIES </li></ul><ul><li>(current & fixed) (current) </li></ul>
  8. 8. LONG TERM LIABILITIES <ul><li>These are debts need paying back in the future (one year +) </li></ul><ul><li>Examples: Loans, mortgages </li></ul>
  9. 9. NET ASSETS <ul><li>ASSETS minus LIABILITIES </li></ul><ul><li>(current & fixed) (Current & fixed) </li></ul>
  10. 10. The second section of the balance sheet <ul><li>This looks at where the money which was used to buy the long term and short term assets came from </li></ul>
  11. 11. The start up of the business is funded by: <ul><li>CAPITAL & RESERVES </li></ul><ul><li>SHARE CAPITAL – The amount of money paid by shareholders in return for a share in the business. </li></ul><ul><li>PROFIT & LOSS ACCOUNT – Net profit from the previous financial year is transferred into the balance sheet. </li></ul><ul><li>RETAINED PROFIT – businesses do not give all of their profits back to shareholder </li></ul>
  12. 12. <ul><li>NET ASSETS SHOULD EQUAL THE AMOUNT OF MONEY THAT HAS BEEN INVESTED IN THE BUSINESS. </li></ul><ul><li>BOTH PARTS OF THE BALANCE SHEET MUST BALANCE </li></ul>Exercise

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