Finanacial Statements

Balance or a balance sheet – is the main form of summary financial statements, which reflects the composition, location and sources of all funds available in the enterprise, institution or organization for a certain date. Balance sheet – a statement of financial position of the company, consisting of the left (assets) and right (liabilities) parts, the results of which should be equal. Learn more at this site: Munear Kouzbari. Assets (or cash) – cash resources, as well as material and intangible resources in monetary terms. Liabilities (or the amount of data on capital and liabilities of the organization) – sources of education funds of the company, its financing, grouped according to their composition, membership and purpose. Basic principles of the balance sheet: 1) the principle of bilateralism follows from the balance equation in which the assets are liabilities, and 2) the principle of monetary measure – the account and balance sheet items are extremely monetary value, and 3) the principle of autonomy – balance sheet data of the company separate from the financial condition of its owners. Drawing up the balance needed in the management work to the development of any solution, since the balance gives a comprehensive overview of the current financial condition of the company and allows for its detailed analysis. This document allows you to: review balances for all active and passive accounts in cash equivalent, to conduct a structural analysis, an analysis of the company's development over time in the presence of balance sheets for a number of periods. The balance sheet allows us to define a number of important absolute and relative indicators of financial stability and efficiency of the company in terms of return on investment in its funds. These include: working capital, ie the difference between current assets and current liabilities, working capital ratio, ie the quotient of current assets to current liabilities, return on equity (ROE, return on equity) – the ratio of profit to equity capital; return on assets (ROA, return on assets) – the ratio of profit to total aktivam.Sootvetstvenno, working capital should be positive, and its ratio – greater than 1, then the liquidity of the company described as satisfactory. Coefficient of roe allows evaluate the effectiveness of the owners of capital invested, and the coefficient of roa to compare the scaling of the company with increasing profitability. By compiling a zero balance means making the balance companies, since they are not carrying out activities that are not generating traffic on your checking account are not accrued salary.