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Balance Sheet

The most important terms in time management

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What is a balance sheet?

A simple balance sheet is like a snapshot of the company’s overall financial health. It shows the assets, liabilities and equity of the company. This brings us to simple equation:

Balance sheet equation Assets = Equity + Liabilities

In Assets a company will show all the equipment, building and vehicles it has and also cash and accounts receivables.  The equity is the value of the shares issued by a company.  Liabilities show what company owes to other parties. This usually includes trade debt, short term and long term loans.

What does a balance sheet show?

A simple balance sheet should show three distinct parts: assets, liabilities and capital or “owner’s equity”, as it’s sometimes termed. Thisincludes details like the specific assets and their cost value. Based on the balance between assets on one side and owner’s equity with liabilities on the opposite side, you can get a rough sense of the valuation of a company.

Balance sheet report

Balance sheet report and pencil

How does a balance sheet help you?

A balance sheet is essentially a part of financial statement. It’s a simple but powerful tool to help gain an overview of a company’s financial health. You can use it to understand what is the companies profile, what is th difference between accounts receivable and account payble, what is the overall debit of the company.

zistemo puts business reporting in your hands by allowing you to generate and compare data over multiple time periods. Analyzing the business data is important in decisions that involve the growth of the company such as whether to buy more equipment, or if there’s enough value for investors

Accounting system B Balance sheet


Related words

Retainer

What is a retainer? Described simply, a retainer is an open-ended contract with a service provider. For this you pay an agreed fee and in return have access to their services when required.

R

Double Entry Bookkeeping

What is double entry bookkeeping? Double entry bookkeeping is a system of accounting where every transaction is reflected in two accounts: credit and debit. There are always two columns for transactions - one for debit entries and one for credit entries.

Billing software Bookkeeping D Double Entry Bookkeeping

Gross Income

What is Gross Income? As a concept, gross income is exactly what it sounds like: the total of all sources of “gain” or revenue, before any considerations of deductions like expenses or taxes.

G

Bill

What is a Bill? A bill, also known as a bill of exchange, is an order that is used mainly in international trade. It obligates one party to pay a fixed amount of money to another party at a given date.

B

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