Balance Sheet

A Balance sheet provides a snap shot of the assets and liabilities of a
business at a point of time.

Balance sheet for XYZ plc as at 31st March 2003

Fixed assets are:

Assets that provide a benefit for the business in the long-term (normally for
at least a year), e.g. buildings and machinery

Assets that the business intends to keep

Current assets

Current assets are assets that will be used up or sold in the next year + the
cash balances kept in the business. The main categories are:

Stock finished goods, work in progress and raw materials .

Debtors people who owe the business money

Cash in the bank and in the cash box.

Current liabilities

Current liabilities are what the business owes in the short run ie within the
next year.. The main categories are:

Creditors money owed by the business in the short term

Bank overdraft amounts due within the next 12 months.

NOTE: The total of
current assets minus current liabilities is known as
working capital
. This is amount of money available for the day to day
running of the business.

Long-term liabilities

Long term liabilities are the monies the business has borrowed for a period of
more than a year. The main ones are:-

Bank loans

- Share capital is the money invested in the business by the owners.

Profit and loss reserves are the profits due to the owners that have not
already been paid out in dividends.

- Shareholder funds the money invested by shareholders through share
capital and reserves added together.