Definition of Balance Sheet:-
The Balance Sheet is a financial statement that shows what the business is worth at one point in time.
A standard company Balance Sheet has three parts, assets, liabilities and ownership capital.
The purpose of the Balance Sheet is to give users an idea of the company’s financial position along with displaying what the company owns and owes. It is important that all investors, suppliers and/or customers know how to use, analyse and read this type of document.
Balance Sheet accounts do not show results, even if one can infer this by comparing the balance of accounts from different times.
How the Balance Sheet Works:-
The Balance Sheet is divided into two parts that, based on the following equation, must equal each other, or balance each other out. The main formula behind balance sheets is:
Assets = Liabilities + Shareholders' Capital
As the Balance Sheet is a snapshot at a single point in time of the company’s accounts - the Balance Sheet, along with the income and cash flow statements, is an important tool for investors, suppliers and/or customers to gain insight into a company and its operations.
Further information is available via http://www.creditserve.co.uk/Products-and-Services/Company-accounts where you can obtain full information on all Companies House documents including Annual Accounts, Annual Returns & Change of Director.
Creditserve are able to offer these documents on a one off 'pay as you go' service or within packages including on line business credit reports, international credit reports and/or debt recovery.
Should you wish to discuss any subject relating to this blog I would be more than happy to help.
This blog was written by Martin Brown on 7th January 2013
@creditserve
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