engleski

Analysis of the Balance Sheet Categories' Flows

The balance sheet, along with the profit and loss account and statement of cash flows, is an important tool for investors to obtain insight into a company and its operations. The balance sheet is a snapshot of the company’s accounts - comprising its assets, liabilities and shareholders’ equity at a specific point in time. The purpose of the balance sheet is to give users an idea of the company’s financial position along with displaying what the company owns and owes. It is important that all investors know how to use, analyze and read this financial statement. The flow of balance sheet categories is determined by the changes in the balance sheet categories and categories of income statement. The interdependency between trends of balance categories is obvious - the trend of one particular balance category can be expressed as the resultant of other trends of balance categories. It is typical that the trend of balance categories has an adequate impact on the trends of successfulness in business. So, when there are structural increases and increases in the balance sheet categories, it can be expected that such situation would, in normal conditions, positively affect the trends of successfulness.

balance sheet; flows; trend

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