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7 Cards in this Set
- Front
- Back
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What are the two sides of a balance sheet? |
Funding and investment/operating assets |
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What are the components of funding? |
Share capital, retained earnings, long term liabilities (includes Equity and non-current liabilities) |
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What are the components of investment/operating assets? |
Non-current assets, current assets, short-term liabilities |
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Non-current assets (3 types) |
Property, plant, equipment (PPE) Goodwill Investments |
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How can the value of PPE be adjusted within balance sheets (3 ways) |
Depreciation - either straight line depreciation or depreciation based on use/activity (only used by 5% of companies) Revaluations: non-current assets are usually shown at cost less accumulated depreciation Impairment: non-current assets can be subject to an impairment test if there is an indication of impairment eg decline in the property market |
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What is goodwill? |
= Consideration Paid minus Fair Value of Net Assets Acquired Usually happens when one company acquires another and it is the intangible assets of the company which make it worth more than what was paid for it |
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Assessing Working Capital (3 components) |
Inventory (stock) Accounts receivable (debtors) Accounts payable (creditors) |
