Finance and Management - 6

In the earlier blog, we put up a rough structure to the various components in a balance sheet, but we haven’t explained the various headings. While it is pretty logical to understand these from common parlance, explaining them here would add to the context.

• Cash - the cash is the revenue that is earned by the company
• Receivables - are outstanding (uncollected bills) amount to be collected from the customers
• Inventory - these are finished goods that have not yet been sold
• Fixed Assets - includes the investment of money into plant and machinery
• Account Payable - the payment to be done to suppliers etc
• Notes Payable - some of the promissory notes (like cheques etc) that are to be paid up
• Long Term Debt - Long term loan that might have been taken from banks, and have been invested in the business
• Owner's Equity - this includes the initial capital generated by the promoters, (share holder also later on)

Read in Kannada:
http://somanagement.blogspot.com/2011/07/blog-post_3720.html