Balance Sheets Flashcards
What financial info do you need in order to carry out ratio analysis?
Income statement & balance sheet
What key financial values does a balance sheet hold? (In general terms)
-Items the business owns
-Items the business owes
-The business’ source of finance (share capital and reinvested profits)
What are reserves?
The retained profit that has been reinvested into the business over time
What is total equity?
The amount of money shareholders have invested into the business + reserves
Formula for total equity?
Reserves + share capital
What is an asset?
An item of value that is owned by a business
What is a liability?
Money that is owed by a business
What are the 2 types of assets?
Non-current & current
What are other names for non-current assets?
-long term assets
-fixed assets
What is a non current asset?
An item of value that stays in the business for a long period of time (usually over a year)
What is another name for a current asset?
-short term asset
What is a current asset?
An item of value that stays in the business for a short period of time
What are some current assets?
-inventory/stock (food)
-receivable (money owed by customers)
-cash (notes,coins,E-balance in bank)
