A balance sheet is a financial statement that shows a company’s financial position at a specific point in time, including its assets, liabilities, and equity.
The balance sheet is divided into two main sections:
- Assets: The assets section is divided into current assets and non-current assets.
- Current assets are those that can be easily converted into cash within one year. The assets section includes fixed assets, non-current investments, long-term loans and advances, and other non-current assets in the non-current assets category. The current assets category includes current investments, trade receivables, cash and cash equivalents, and other current assets.
- The non-current assets are those that are expected to provide economic benefits to the company for more than one year.
- Liabilities: The liabilities is divided into current liabilities and non-current liabilities.
- The non-current liabilities are those that are due after one year. The non-current liabilities includes long-term borrowings, deferred tax liabilities, and other long-term liabilities.
- Current liabilities are those that are expected to be paid off within one year. The current liabilities section includes short-term borrowings, trade payables, and other current liabilities.
Eequity: Equity is the residual interest in the assets of the company after deducting liabilities. It represents the owners’ claim on the company’s assets. The equity section includes the equity share capital and the reserves and surplus.
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