Financial Analysis - Balance Sheets Flashcards
What do balance sheets show?
The value of all business’s assets and liabilities and the capital of a business
How do you calculate net assets?
Total assets minus total liabilities
What are non-current assets?
Assets that the business is likely to keep more than a year
What do non-current assets do overtime?
Lose value
What is depreciation?
When assets lose value
What are current liabilities?
Debts that need to be paid within a year
What is working capital?
The amount of cash that the business has available to pay its day to day debts
How do you calculate working capital?
Current assets minus current liabilities
What is capital expenditure?
Money used to buy non-current assets
Why are suppliers interested in working capital and liquidity?
Look how liquid the firm’s assets are
