The Balance Sheet is the quintessential Financial Statement for the financial analysis of a company as it shows the financial position at a given moment, consists of the following equity components:
Assets are that the company and the receivables in favor of it.
Liabilities: obligations to third parties, for whose coverage the company will have to relinquish some of their benefits and / or commit the resources it controls.
Equity: starting consists of capital (essentially, the disbursement of shareholders), plus reserves and undistributed profits.
Equal equity components
Active on the one hand and Equity + Liabilities on the other must be the same as the money you have allocated must be exactly the same as we obtained. Thus the fundamental equation of heritage is fulfilled
ASSETS = LIABILITIES + NET WORTH
In turn, these patrimonial masses are divided for financial analysis.
CURRENT ASSETS. Are the elements that have not expected to last more than one year in the company.
It has three distinct parts:
1. STOCKS: they are the goods we have in store.
2. REALIZABLE: is the money you owe us or are about to become effective.
3. AVAILABLE: is the money we have cash either in the form of notes and coins on hand or in banks.
SHAREHOLDERS EQUITY
It is that part that has been generated self-financed, and therefore should not be returned to anyone. It is the own money. We find the Capital that is the contribution of the partners at the time of incorporation of the company or future capital, reserves and profit for the year also appear.
PASSIVE
TERM LIABILITIES that the company has to repay more than one year .So therefore long-term debts.
CURRENT LIABILITIES. Obligations that the company has returned in less than a year. They are short term.
The balance is very important when analyzing it, mainly for the following reasons:
It indicates the quality of the liabilities of the company, and analyze the liquidity of assets.
In analyzing the financial position of the company we have information on the maturity of this market.
It gives information on the solvency of the company and warns us about how you can deal with financial situations, investment and growth.
Provides financial information on the origin of the funds were subsequently invested in economic resources.
Balance is like the skeleton of a company, provides information on the structure of assets and liabilities, their distribution in terms of maturity for liabilities, and degree of liquidity of different asset positions. It also tells us the path that has followed the company over time. Therefore Balance is the key element that serves an analyst to decide whether a company has a solid structure or not. Through the financial analysis it is known payment capacity that the company has short-term, and for that the relationship between current liabilities and current assets basically analyzed.
Assets are that the company and the receivables in favor of it.
Liabilities: obligations to third parties, for whose coverage the company will have to relinquish some of their benefits and / or commit the resources it controls.
Equity: starting consists of capital (essentially, the disbursement of shareholders), plus reserves and undistributed profits.
Equal equity components
Active on the one hand and Equity + Liabilities on the other must be the same as the money you have allocated must be exactly the same as we obtained. Thus the fundamental equation of heritage is fulfilled
ASSETS = LIABILITIES + NET WORTH
In turn, these patrimonial masses are divided for financial analysis.
CURRENT ASSETS. Are the elements that have not expected to last more than one year in the company.
It has three distinct parts:
1. STOCKS: they are the goods we have in store.
2. REALIZABLE: is the money you owe us or are about to become effective.
3. AVAILABLE: is the money we have cash either in the form of notes and coins on hand or in banks.
SHAREHOLDERS EQUITY
It is that part that has been generated self-financed, and therefore should not be returned to anyone. It is the own money. We find the Capital that is the contribution of the partners at the time of incorporation of the company or future capital, reserves and profit for the year also appear.
PASSIVE
TERM LIABILITIES that the company has to repay more than one year .So therefore long-term debts.
CURRENT LIABILITIES. Obligations that the company has returned in less than a year. They are short term.
The balance is very important when analyzing it, mainly for the following reasons:
It indicates the quality of the liabilities of the company, and analyze the liquidity of assets.
In analyzing the financial position of the company we have information on the maturity of this market.
It gives information on the solvency of the company and warns us about how you can deal with financial situations, investment and growth.
Provides financial information on the origin of the funds were subsequently invested in economic resources.
Balance is like the skeleton of a company, provides information on the structure of assets and liabilities, their distribution in terms of maturity for liabilities, and degree of liquidity of different asset positions. It also tells us the path that has followed the company over time. Therefore Balance is the key element that serves an analyst to decide whether a company has a solid structure or not. Through the financial analysis it is known payment capacity that the company has short-term, and for that the relationship between current liabilities and current assets basically analyzed.
There are two tools that show the financial health of the company: the calculation of Working Capital and financial ratios which will be discussed later. While the balance sheet is the most important financial statement, you can not judge a company only through it, but we must take into account the rest of the financial statements in order to achieve a more complete and representative opinion.