How to Prepare a Balance Sheet

One of the important elements of financial statement analysis is the balance sheet. This shows your assets—which is what you own, your liabilities—which is what you owe, and your owner’s equity—which is yours and your partners' investment in the business.

First, you'll need to determine the financial statements that you or your financial professional will generate for your business. These financial statements will help you determine your firm's financial position at a point in time and over a period of time, as well as your cash position. Many small businesses fail because an owner loses a grip on the firm's financial position. If you understand financial statements, that won't happen to you.

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Assets

  • Line 1 is the firm’s cash account. Small business firms must keep some cash on hand for day-to-day transactions. Business firms also need to keep cash on hand for emergencies and to take advantage of any bargains they might find in the marketplace.
  • Line 2, accounts receivable, represents what your credit customers owe you if your firm extends credit. Since the balance sheet is like a snapshot of a firm’s financial position at one point in time, the figure for accounts receivable and all the other accounts are accurate for the day on which this financial statement is developed.
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  • The last asset on the sample balance sheet is fixed assets. This asset is stated on Line 4 and includes any equipment and vehicles you own and any land and buildings you own. These assets normally refer to the large and highly valued assets that are owned by your business firm and those that can be depreciated over time.
  • The value of the asset accounts is totaled and stated on Line 5. Total assets are the value of everything your firm owns.

Liabilities and Equity

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  • Line 7 shows any long-term bank loans or loans from other sources that you’ve taken out with a maturity of more than a year. You may have had to use long-term loans to keep your firm solvent.
  • Over the summer, the bubble in the Chinese stock markets burst, wiping out trillions of dollars in valuation. Despite extensive efforts to contain the plunge, the Shanghai Composite Index had declined 43 percent on Aug. 26 since its peak on June 12.
    "It became an issue about so many things, such as the environment, energy, workplace disasters and the role of big government. It became a lightning rodfor peoples' anxieties," she explained.
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    STEP 7: DEVELOP a special interest
    为什么会有这样的不同?原因并不是因为双方获得的信息不同。正如库迪斯和沃斯所指,荷兰金融圈里的每个人都知道和了解所发生事件的严重程度。也不是因为Seppenwolde的贷款机构不得不重建自身财务。违约几周后,贷款机构就知道他们没有损失一毛钱。
    Teach First补充称,与企业的合作非常重要,这不仅是因为资金问题,还因为这能帮助学校让学生掌握现代雇主所需要的更多技巧。

Balance Sheet Example

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Assets Value
1.Cash $ 40,000
2.Accts Rec 200,000
3.Inventory 180,000
4.Fixed Assets 400,000
5.Total Assets 820,000
Liabilities and Equity Value
6.Accts Payable $ 180,000
7.LT Bank Loans 240,000
8.Owner's Capital 400,000
9.Total Liab & Equity 820,000

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