The Balance Sheet

The balance sheet is a snapshot of the firm. It is a convenient means of organizing and summarizing what a firm owns (its assets), what a firm owes (its liabilities), and the difference between the two (the firm's equity) at a given point in time. Figure 2.1 illustrates how the balance sheet is constructed. As shown, the left-hand side lists the assets of the firm, and the right-hand side lists the liabilities and equity.

Assets: The Left-Hand Side

Assets are classified as either current or fixed. A fixed asset is one that has a relatively long life. Fixed assets can be either tangible, such as a truck or a computer, or balance sheet

Financial statement showing a firm's accounting value on a particular date.

24 PART ONE Overview of Corporate Finance

7 Ways To Success While You Sleep

7 Ways To Success While You Sleep

By setting up various online operations, you can generate perpetual income. Let Your Wealth Increase Through Successful Online Ventures While You Sleep and Live Like a King. Learn How to Implement and Management Your Own Online Empire. Worldwide ecommerce sales to consumers are now at around 1.5 trillion annually and still growing at a rapid rate as more and more people spend for more products and services.

Get My Free Ebook

Post a comment