Balance sheet
what is the general balance?
The balance sheet is a financial statement that provides information about the assets, liabilities Y net worth of a company, for a specified period of time.
Thus, it shows the corresponding data up to the date the balance sheet is issued, generally the close of the fiscal period. ANDIn terms of positions, a balance sheet provides information about the accounting situation of a company.
Balance sheet items
A balance sheet contains 3 main elements:
- Assets: those possessions or property of the company. In turn, these can be:
- Current assets: those that can be transformed into money in the short term (cash, accounts receivable, etc.).
- Non-current assets: possessions of the organization essential for the performance of its activities. They tend to suffer depreciation (real estate, long-term investments, etc.).
- Passives: They are the obligations, debts or commitments that the company has. They may be:
- Heritage: It is comprised of capital, retained earnings, earnings from the previous period and, in some cases, legal reserves.
Balance sheet types
There are at least 3 types of balance sheet: cComparative, consolidated and pro forma (future) situation.
Comparative balance sheet
The comparative balance sheet includes different observations on the items shown in the balance, during different periods.
With the corporate balance sheet you can see the value evolution of an asset, liability or equity unit of a company, over time. Thus, this can have a column that indicates the percentage change. This way it will be clearer to see which stock has performed better or worse.
Consolidated balance sheet
The consolidated balance sheet, which It is used in companies that have subsidiaries or affiliates, shows the joint information of all companies, as if it were only one.
The consolidated balance sheet, or consolidated balance sheet, allows evaluating the situation of the assets, liabilities and equity of a company as a whole, without having to analyze each subsidiary balance sheet on a case-by-case basis.
Proforma balance sheet
The pro forma balance sheet is prepared as a forward-looking estimate or prediction. The objective of this is to evaluate the financial situation of a company based on a future estimate that is feasible. Thus, it is an important instrument for the formulation and evaluation of projects.
Balance Sheet Example
To better understand this concept, let us see as an example the balance sheet of an SME dedicated to the manufacture of shoes, during the fiscal period of January 1, 2018 to December 31, 2018:
| Active | |
|---|---|
| Cash | $ 50,000 |
| Deposits | $ 125,000 |
| Finished products | $ 80,000 |
| Machinery | $ 220,000 |
| Total assets | $ 475,000 |
| passive | |
| Providers | $ 80,000 |
| Loan | $ 50,000 |
| Total liabilities | $ 130000 |
| Heritage | |
| Capital | $ 300,000 |
| Accumulated profit | $ 45,000 |
| Total assets | $ 345,000 |
| Total liabilities and equity | $ 475,000 |
In this, the assets, liabilities and equity of the organization at the close of the fiscal period, at the end of the year.
Once the balance is obtained, it can be used to know about the situation of the organization or to compare with previous periods, among other types of uses.
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