He balance it's a financial state that shows the economic situation of a company on a certain moment. This document reflects the assets, liabilities and equity of the company and is used to know the financial situation of the company and make important decisions.
He balance It is made up of two columns: assets and liabilities. He asset refers to the goods and rights that the company has, while the passive refers to the obligations and debts that the company has to pay.
The main purpose of the balance sheet is to show how much is a company worth and what does it owe in order to determine your ability to meet your financial obligations and pay your debts.
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What information can be obtained from a balance sheet?
He balance offers a clear vision of the financial situation of a company. Some of the information that can be obtained from a balance sheet are:
- The value of the assets and rights of the company (assets).
- The debts and obligations of the company (liabilities).
- The capital contributed by shareholders (equity).
- The liquidity of the company.
- The solvency of the company.
- The profitability of the company.
All of this information is invaluable to investors and lenders, as it allows them to understand the company's financial situation and make informed decisions about whether to invest or lend money to the company. In addition, the balance sheet is also useful for the internal management of the company, since it allows managers to make decisions based on the current financial situation.
How is a balance drawn up?
To draw up a balance, you must collect financial data of the company on a certain date. These data are divided into two columns: assets and liabilities.
In the asset column, the assets and rights of the company are registered, which are divided into current and non-current. Current assets and rights are those that are expected to be converted into cash within one year, while non-current are those that have a duration of more than one year.
In the passive column, the obligations and debts of the company are recorded, which are also divided into current and non-current. Current obligations and debts are those that must be paid within a year, while non-current are those that last for more than one year.
Finally, it is calculated company net worth, which is obtained by subtracting the liability from the asset. Net worth represents the capital contributed by shareholders and the earnings accumulated by the company.
It is important that the balance sheet is prepared regularly to maintain an updated vision of the financial situation of the company.
