What is the statement of the financial situation?
The statement of the financial situation, also known as balance sheet, is a financial document that provides an overview of the entity's finance at the moment. These statements are commonly used by large and small companies, but can also be applied to personal finances, for people who want to generate a document they can use to review their financial situation for budget decision -making or financial plans. Many accounting programs have mechanisms for automatic creation of one.
In the financial situation, there are two main areas. One covers assets, all that own person or company, including real estate, cash in hand, bank account content, etc. The other party includes obligations, owed funds. The statement usually divides these sections into several categories for easy references so people can quickly find the topic of specific interest, such as due or due loans.
also include ownership capital or shareholder own capital in business. Assets BY was to compensate for obligations as soon as ownership or shareholder is own capital, and if he does not, it is a sign that the financial statement is out of balance. This is in accordance with an accounting equation that states that assets = obligations + ownership or own capital. By the way, this explains the term "balance sheet", which reflects the idea that two parts of the leaf should be the same or balanced.
Usually, a statement about the financial situation at the end of each month will be generated. Searching for previous months can provide information on how the company's finances are proceeding, and these documents can also be compared to statements from the same month in previous years. This document can be made a decision on other steps. If, for Examples, the company has a lot of assets, it can be a sign that it can be conveniently expanded because it has available capital.
the company that isfor publicly traded, they must provide the publication of their financial health, including a statement of a financial situation. They are provided to shareholders on the basis of the application and are also commonly published to be easily accessible to potential investors. If the company has a website, they can be found in a site that contains documents that the Company is obliged to publish by law.