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Showing posts from January 11, 2009

An Apparatus called BALANCE SHEET

Well, we all are aware abt the SATYAM fiasco, a lot many of us are familiar with BALANCE SHEET as the financial instrument, a device to detect liquidity... a tool for defining financial position of a business... Balance sheet is a statement of its wealth (assets) and what it owes to others (liabilities) at a particular point in time. The assets could be fixed assets like land, buildings, plant and machinery. They could be movables like cars or computers. They could also be liquid assets in the form of cash reserves or receivable payments due to the company from those it has sold goods to. Liabilities are anything the company has to pay to others. They would include payments due to its suppliers. Loans taken from others as well as interest due on those loans would also be part of the liabilities. What is owed to the shareholders would also fall in this category. Construction : Balance sheets present this information not explicitly under the heads assets and liabilities, but rather