let’s take a look at the balance sheet example. the balance sheet is an asset and liability sheet of the public company. it’s helps peoples to understand the debt assets set of the company on the each side. which is very important for investors who invest in the stock market. so let’s take a deep look on; step by step , what is all about balance sheet ?
balance sheet example (overview)
balance sheet show the current and non current asset on the right side. then, on the other side ; it show current and non current liability , and also which shows the equity of that industry. were this balance sheet can determine the total asset, liability, and equity. so next, let’s look at assets and liability on each side and every line.
current asset
the cash and cash equivalents, accounts receivable, inventory, another current asset, and prepaid expenses. These are the current assets of the industry. which these assets are helps to turn the asset into cash. within 12 months. so it is called as current asset.
balance sheet; noncurrent asset
the non current asset are non current receivable , non current investment , plant, property and equipment , patent, trade mark , and other intangible asset. then, finally good will. this asset cannot be converted to money within 12 months. that’s why it is called as non current asset.
current liabilities
current liabilities are very important because it’s are payable from the industry. this include Account payable, notes payable , accrued expenses and taxes payable .however this all liabilities are payed within less than one year. if the current liability increases continuously. then, that particular industry will be less profitable when you compare its previous income.
noncurrent liabilities
long term debt , deferred tax , provision etc… which is called as non current liability . for this reason, this debt doesn’t affect more; inside the company. but which is an issue in the long run. moreover, this type of asset are taken more than one year to pay of the debt.
balance sheet; equity
when you see the balance sheet example. which show the equity of that particular industry. equity includes share capital, additional paid-in capital, retained capital, and treasury stock. additionally, if you add all of the things together. then, you will get the total equity of the company.
total assets.
furthermore , when you add all of the current and non current asset together . then, you will get the answer of total asset value. here we show the balance sheet example. but when you see the balance sheet from a particular public industry.
which shows you everything. that I wrote here. so if you want to calculate and find the total asset of the certain company compare and add all together. that’s were you’ll find the total asset value of the company.
total liability
while when reading the balance sheet, most of them make the big mistake. for the reason, to find the asset value. they add all the current and noncurrent assets. but they do the same thing for; finding the total liabilities.
when you add the liability side , most of them forget to subtract the equity . because equity is among the liabilities side. however, you can see this on our balance sheet example image.
don’t add the equity when you calculate the liabilities. just add only the current and non-current liabilities. that’s, where you’ll find the total liability of the industry. now I think you’ll know what is all about the balance sheet. if you have any more doubt in balance sheet example , then don’t hesitate , feel free to contact us. here we’re ready to help you.