Understanding The Balance Sheet

The Balance Sheet of a company shows the financial position i.e. Assets & Liabilities of the company as on a particular date. Eg – as on 31st Mar 2010.Debt-Equity Ratio shows the proportion of assets provided by the borrowers and owners of the company.

Can you explain Assets in a Balance Sheet?

Basically, assets are something of value that a company owns in the physical form or intangible items with no physical form. For example, the land owned by the company is its asset. Assets determine the success of a company.

What are Liabilities in a Balance Sheet?

Liabilities are something of value which the company owes and has to return to other individual/s or company. Liabilities also include the losing value of company-owned assets i.e. the depreciating value from time-to-time.