{"id":4313,"date":"2023-03-11T03:47:38","date_gmt":"2023-03-11T03:47:38","guid":{"rendered":"https:\/\/fisdomdevel.wpengine.com\/glossary\/balance-sheet\/"},"modified":"2023-03-11T03:47:38","modified_gmt":"2023-03-11T03:47:38","slug":"balance-sheet","status":"publish","type":"post","link":"https:\/\/www.fisdom.com\/glossary\/balance-sheet\/","title":{"rendered":"Balance Sheet"},"content":{"rendered":"

\nBalance sheets reveal the financial position of a company and all its assets and liabilities on a particular date, usually the last date of the financial year. The three main components of balance sheets are <\/p>\n

Shareholder\u2019s funds – Shareholders’ funds include share capital (Equity share capital and preference share capital) as well as reserves and surplus. <\/p>\n

Liabilities – This includes long-term borrowings like debentures, bonds, secured loans, etc., and short-term borrowings like current liabilities (creditors, accounts payables, etc.)<\/p>\n

Assets – This component includes fixed assets which are long-term assets like plant and machinery, land and building, long-term investments in other companies or subsidiaries, etc. and short-term assets like current assets and advances<\/p>\n

Utility of balance sheets<\/h2>\n

Balance sheets are used to calculate key financial ratios that indicate the liquidity position and working capital position (current ratio\/ quick ratio), leverage position of the company (debt-equity ratio), the efficiency of resources (asset turnover ratio), and other key ratios like ROE (Return on Equity), ROA (Return on Assets), etc. to ascertain the financial health of a company<\/p>\n

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Balance sheets reveal the financial position of a company and all its assets and liabilities on a particular date, usually the last date of the financial year. The three main components of balance sheets are Shareholder\u2019s funds – Shareholders’ funds include share capital (Equity share capital and preference share capital) as well as reserves and […]<\/p>\n","protected":false},"author":67,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-4313","post","type-post","status-publish","format-standard","hentry","category-investing-essentials"],"_links":{"self":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts\/4313","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/users\/67"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/comments?post=4313"}],"version-history":[{"count":0,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts\/4313\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/media?parent=4313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/categories?post=4313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/tags?post=4313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}