Balance Sheet Presentation

Balance Sheet -A Financial Management Tool

Balance Sheet Definition and Purpose

• Systematic organization of everything “owned” and “owed” by a business or individual at a given point in time
• Features:
• Provides a SNAPSHOT of the business
• Fundamental to sound management decision making
• Measurement of financial success
• Communicates financial position to creditors

Balance Sheet Key Measures

• Total Assets:
• The value of all financial and capital resources owned by the business
• Total Liabilities:
• The value of total debt obligations
• Owner’s Equity or Net Worth:
• The value of the owner’s investment as determined by subtracting total liabilities from total assets

Assets − Liabilities = Net Worth (Equity)

Completing a Balance Sheet

• Current Assets
• Cash
• Accounts Receivable
• Fertilizer and Supplies
• Investment in Growing Crops
• Crops Held for Sale
• Market Livestock

Completing a Balance Sheet

• Noncurrent Assets:
• Breeding Livestock
• Machinery and Equipment
• Buildings
• Investments in Cooperatives
• Land

Completing a Balance Sheet

• Current Liabilities:
• Accounts Payable/Accrued Expenses
• Taxes Payable (Income and Social Security)
• Current Portion: Deferred Taxes
• Current Loans Due within One Year
• Current Portion of Term Debt
• Accrued Interest

Completing a Balance Sheet

• Noncurrent Liabilities:
• Noncurrent Portion: Deferred Taxes
• Noncurrent Portion: Notes Payable
• Noncurrent Portion: Real Estate Debt

Balance Sheet Example

LIABILITIES AND NET WORTH: