The Balance Sheet
An executive manager at a company wants
Balance sheet
FIGURE 3.2 The Three Key Components of a Balance Sheet
FIGURE 3.3Total
Assets
Liabilities
Shareholders’ equity
An asset is anything the company owns which
FIGURE 3.4 Assets and Liabilities
Figure 3.5 presents a simplified balance sheet for Daana’s
Current assets
Long-term assets
FIGURE 3.5 Daana’s Delights Balance Sheet
Two additional points need to be made about balance sheets:
3.2a Assets
Inventory
Accounts receivable
instruments (often referred to as “cash equivalents”).
Why is inventory classed as an asset rather than a liability?
3.2c Stockholders’ or Shareholders’ Equity
Why do you think shareholders’ equity is included on a balance sheet?
