Basic understanding of Balance Sheet (B/S):

1) Non-Current Assets – This is a category u put in all ur fixed assets and investments in subsidiary/asso

2) Current Assets; this is where all liquid assets are categorized such as bank/cash balances, inventories, FD, trade/other debtors, investments in shares etc (where there is movements/changes within 12mths)

3) Intangible assets; an asset that has no substance/non-physical but is of value; such as goodwill (branding) or patent. this is highly subjective area of debate as there is no right way to proof the value.

4) Non-Current liability & current liability; basically this is where all your debt is; split into repayable beyond 12 mths (non-current liabilities) & within 12mths (current liabilities). Examples are trade creditors, hire purchase / loans, amount owing to director etc

5) Equity; means the capital u put into the biz

6) retained earnings/(loss); means the accumulated profits/(loss) you have enjoyed/(suffered) throughout the period from the beginning of your biz till now. Tomorrow i shall share some of the acronym or KPI used by bankers/investors, so when u have a discussion with them, at least u know what they are talking about instead of staring at them with stars/blanks in the mind