The balance sheet is the main source of information about the state of the enterprise

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The balance sheet is one of the main forms (form No. 1) of the annual reporting of enterprises. It must be compiled by all organizations that are on the general taxation system. Visually, it is a table that reflects the sources of funds formation: own and borrowed (liability), as well as directions of use (asset).

The balance sheet of an organization is necessary not only for the tax authorities and external auditors, but, first of all, for the company itself. With its help, you can assess the state of affairs of the enterprise and, based on the analysis of the information received, develop measures to improve the state and determine directions for development. The passive consists of three large sections:

1. Capital and reserves. The amount of funds initially invested by the owners of the enterprise is the authorized capital. In the process of development, it can increase in size, thereby increasing the firm's reliability levels forlenders and attractiveness to potential investors. The section also contains other sources of property formation (additional and reserve capital) and the amount of retained earnings, reflecting the financial independence of the enterprise.

2. Long-term financial obligations. Contains information about long-term loans that the organization has attracted, as well as deferred tax liabilities.3. Short-term obligations are obligations that have been assumed in order to ensure stable and uninterrupted work, maintain current solvency.

The balance sheet is a tool for determining the level of independence, independence of the enterprise. The higher the share in the balance of borrowed funds, the lower the autonomy coefficient.

The company's balance sheet, or rather its active part, shows how the company manages its funds:

1. Fixed assets. The section contains information on long-term investments, the amount of fixed assets and available intellectual property.2. current assets. The section reflects the amount of available stocks, as well as cash (in the form of money on hand and on current accounts, as well as buyers' debts).

Thus, the balance sheet is the main source of information about the property reserves of the enterprise and its solvency, which is very important for potential creditors.means, prospects and scales of technical, intellectual development. The structure of working capital shows how effective the relationship of the company with debtors, the level of its liquidity, the degree of workload of warehouses and the efficiency of the use of free cash.

The balance sheet is the main source of information for analyzing the state of the enterprise. For a deeper assessment and development of a development strategy, it is advisable to study accounting analysis in dynamics in order to determine the main negative or positive trends. This will allow the management of the enterprise to clearly identify the sources of existing problems and will help in the future to more effectively manage the property at their disposal.