There is no specific form of management balance provided for at the legislative level. Many companies develop their own local documents.
The "Assets" line consists of the sum of:
fixed assets;
intangible assets;
warehouse stocks;
accounts receivable;
other current assets.
"Passives" are obtained by adding:
authorized capital;
retained earnings;
accounts payable;
salaries of employees;
loans;
other accounts payable.
Also, some articles can be divided into student data package specific subgroups. For example, in warehouse stocks, indicate product categories.
Long-term liabilities include all debts of an organization that have a maturity of one year or more.
The company's current liabilities are represented by regular and urgent payments such as taxes, salaries of employees, etc.
Management balance analysis
Management balance analysis can be done in different ways. The specific method is chosen depending on the goal.
For example, the essence of the vertical method is that the total amount of the report is taken as a single whole, i.e. 100%. The calculation of all other categories is carried out in shares of this value. With the help of vertical analysis, the structure of the company's funds and their sources is clearly visible.
Management balance analysis
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The horizontal method is based on the comparison of certain indicators for different reporting periods. Thanks to this, it is possible to see and evaluate the dynamics of the changes taking place. Experts recommend the combined use of horizontal and vertical methods, since this will allow a full comprehensive assessment of the business.
It would also be useful to analyze the report by calculating coefficients, with the help of which one can judge individual aspects of the activity.
For example:
Liquidity. This ratio shows how quickly funds invested in assets turn into real finances. Liquid assets can be placed next to short-term liabilities to see if the company can meet them.
Profitability. This ratio can be used to evaluate the profitability of an enterprise. A positive profitability value shows how successfully the company manages its own funds and gives an idea of its value.
Debt. This ratio shows the current debt obligations of the organization. Moreover, both short-term and long-term debts are taken into account. The debt ratio is involved in forecasting possible financial risks, up to and including bankruptcy of the company.
Financial stability. This indicator can be used to judge the strength and stability of a business.
In reality, there are many coefficients, as well as methods of analyzing the management balance. Experts recommend the simultaneous use of several methods.