Statement which shows the financial position of the business that is what the business owns (assets) and what it owes the outsiders(liabilities)
• Assets = owner’s equity(capital) + liabilities, if you need to show or see the financial solvency of the business, to find the capital you do this:
• Start with fixed assets such as land,machine,furniture and equipment
Current assets:
• Then current asset like stock at the end, debtor, bank,.....
Current liabilities:
• Then Current liability such as creditors, overdraft,unpaid insurance
• Then we get working capital (total current assets - total current liability)
• Then we get capital employed (total fixed assets + working capital)
Financed by:
• Take net profit/loss[l-] you get from the income statement
• Add long term loan
• The we get capital( capital employed - [net profit + long term loan])