Balance Sheet Formats
A balance sheet is a crucial report that summarises the financial balances of a business. By analysing the report thoroughly, you can enhance your business performance and improve the financial stability of your business.
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Importance of Balance Sheets
Through a balance sheet, you can get an overview of what your company owns (assets) and what your company owes (liabilities), making it more straightforward for you to plan out the next steps and come up with an effective strategy.
By understanding your financial strength and comparing them with your competition, you can find the areas that need attention and start working on them right away. By subtracting the value of liabilities from assets, we get the owner’s equity or merely the net worth of a company at any specific point in time. Thus, a balance sheet is a critical accounting tool and an essential indicator of information regarding a company’s financial health.
A large number of organisations rely on balance sheet formats created using Vyapar to foster the growth of their business. It helps them keep an eye on assets and liabilities to determine shareholders’ equity. Using Vyapar, you can easily create and manage your formats in MS Excel, Word, Google Docs, and PDF formats.
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Having a comprehensive balance sheet is crucial for determining the financial outlook ofan organisation. By using the Vyapar’s balance sheet formats, you can enter the records of your fixed assets that your business owns, list up all the liabilities in any form,and thereby devise the net worth of your company. We give you the flexibility to create day-by-day, month-by-month, and year-by-year balance sheets. It enables you to enter the projected figures and understand your financial position by simple analysis. By usingbalance sheet records, our business accounting software makes it possible for you to reach your financial goals right ahead of time.
Balance Sheet Formats in Excel
Excel spreadsheets are among the best ways to provide a detailed description of any entry within a balance sheet. By using an Excel balance sheet format, you can set up the entries in separate categories. You can label columns for assets and liabilities for allcategories and make the balance sheet easier to understand.
Further, the Excel sheets provide the privilege to use the standard calculation formulas within the spreadsheets to carry out complex calculations.
Balance Sheet Formats in Word
Word format balance sheets are the simplest formats for businesses in a wide variety ofdomains. Vyapar provides you with numerous customizable formats compatible with MSWord. You can mold the format entities according to your business requirements.
Using Word balance sheet formats, you can make your balance sheet professional. Youget the complete access to the data within the sheet so that you can modify them as you wish. You can easily embed tables within the sheet and display your data in a highly professional way.
Balance Sheet Formats in PDF
PDF balance sheets are fixed format that are used to create similar balance sheets every time. You can customize a PDF balance sheet format and build a fixed pattern to be followed. Once fixed, you can use the format for creating your balance sheets multiple times using the same formatting for all of them.
Using Vyapar’s PDF balance sheets helps build a unique balance sheet format for your business. Using it, you can follow the uniform format for displaying shareholders’ equity across all your business branches. Using Vyapar makes it simpler for the accounting team to handle the data.
Balance Sheet Formats in Google Docs
Vyapar provides you with a wide range of highly customisable balance sheets. Our balance sheet formats are compatible with Google Docs and Google Sheets. You can modify the Google sheet formats entirely and use them according to the requirements ofyour business. It can help you display the liabilities and assets of your business in a simplified way.
You can save time in making recurring balance sheets using balance sheet accounting software. Vyapar is home to a large number of built-in google sheet formats for balance sheet formats. Further, Google sheet formats are easy to use and are compatible across all devices.
Balance Sheet Formats in Google Sheets
You can save time in making recurring balance sheets using balance sheet accounting software. Vyapar is home to a large number of built-in google sheet formats for balance sheet formats. Further, Google sheet formats are easy to use and are compatible across all devices.
Balance Sheet Formats for Start-Up Business
Startups often require simplified yet detailed balance sheets. A pro forma balance sheetis recommended for new companies to help formulate a better business plan. It comprises of year-on-year columns to keep a track on the liabilities and assets growing over time in the short term and long term basis.
Further, a startup balance sheet format consists of the tally of your net worth (shareholders’ equity) along with the working capital. Having such detailed analysis helps foster the growth of a startup and secure fresh capital through loans by understanding the earning potential. It also displays the areas of concern so that they can be eliminated or worked on in the upcoming fiscal year.
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Balance Sheet Formats for Non-Profit Organizations
For a non-profit organisation, management of capital and regulation of assets is of interim importance. Using a balance sheet format built using Vyapar is perfect for existing or new non-profit organisations. They can be highly customised, right from adding the logo to putting up relevant terms and conditions. You can simply highlight theassets and liabilities to understand the working capital and equity of your organisation.
The reusable format is best for creating annualised reports with little efforts, thereby saving time and money required to compile the detailed analysis for a year-long work. You can use this format in MS Excel and Google sheets according to your convenience.Further, Vyapar enables you to save them in your drive for future reference.
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Balance Sheet Formats for Small Business
Small businesses possess a great growth potential, and at the same time are vulnerabletoo. Ensuring the success of a small business requires continuous tracking of balance sheets. An industry-specific balance sheet format for small businesses is the best-situated format to track performance.
By using Vyapar, you can devise the longevity of your current business plans and understand the liabilities held by your business for short and long terms. It helps you manage the working capital and plan to achieve a better success rate. Further, you can compare your performance with previous years to ensure that you are working efficiently.
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Balance Sheet Formats for Self-Employed
A self-employed balance sheet provides details about the owner’s equity. A sole proprietor’s balance sheet consists of the resources in the possession and the obligations over them in terms of liabilities. The data is calculated as per the end of the day marked in the balance sheet.
Creating a self-employed balance sheet does not differ much from an organisations balance sheet except for minor differences like owner’s equity rather than shareholders’ equity. Vyapar enables you to fasten the process of creating a balance sheet and save your time and money required to handle a year-long data.
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What are the Balance Sheet Essentials?
Understanding balance sheets is essential to utilise the maximum benefits it carries withitself. Various organisations and individuals use balance sheets to calculate the net worth of a business. The net worth or shareholders’ equity is determined by subtracting the liabilities from assets at any specific point in time. It serves as the financial position of a business on a daily, monthly, quarterly, or yearly basis. All balance sheets follow the basic formula to determine the equity.
Equity = Assets - Liabilities
Vyapar offers you much more than a simple balance sheet format. Along with the basic functionality of adding assets and liabilities for a quick business outlook, it provides you customisation to enter other useful attributes like cash flow, working capital, income-generating assets, accounts receivables, and further inventory details.
Industry-specific balance sheet formats allow you to track equity regularly, like a trucking balance sheet format enable simplified tracking of equity on a truck-by-truck basis. Similarly, calendar specific formats provide an automatic comparison on a daily, weekly, monthly, quarterly, or yearly basis. All balance sheet templates come with pre-set formulas for determining accurate results.
Current Assets
The current assets (also known as current accounts) represent all the organisations’ assets that are expected to be either consumed, exhaust, sold or used by employing thestandard procedures and business operations within a year. The current assets constitute various attributes like cash and cash equivalents, prepaid liabilities, liquid assets, marketable securities, and other stock inventories.
Current assets are short-term assets that are essential for running a business, either by paying for the daily expenses or by getting used during the business operations. These assets are capable of being liquidated at a fair price in a short term period, often one year. Depending on the industry’s nature and the products or services marketed by an organisation, current assets can vary vastly.
Fixed Assets
The fixed assets (also known as capital assets) represent the tangible equipment or property pieces that any business utilise to generate revenue during their business operations. The term “fixed” translates that these assets take a large amount of time to liquidate and are not supposed to be converted into cash within a calendar year. However, tangible assets are subject to periodic depreciation.
Fixed assets appear in the balance sheet as property, plant, and equipment (PP&E) in most cases. Fixed assets are tangible, and are usually disposed of for a salvage value near the end of their useful life. Capital assets can be used to get credit when necessary, and they attract investors as they hold long term values. Purchasing fixed assets is termed as an investment and is a strong indicator to the investors that the company possesses growth potential. Download formats
Current Liabilities
The current liabilities (also known as short term debt) represent an organisations’ short term financial obligations. These liabilities are due within a normal operating cycle. Mostly the term of current liabilities lies within the same calendar year. Here the term operating cycle refers to a complete cycle of investment made by the company and returns generated from sales.
These liabilities are usually settled up using the current assets that are to be used withinthe calendar year. The money owed to a supplier is a perfect example of current liability.Thus, the ratio of current assets to current liabilities plays a crucial role in determining the organisations’ ability to repay its short term debt before due dates.
Some examples of current liabilities include dividends payable, short term debts, account payable, and income tax. The analysis of current liabilities against current assets grabs the immediate attention of investors, as it portrays the management capabilities of a business.
Long-Term Liabilities
Long term liabilities (also known as long-term debt or noncurrent liabilities) represent anorganisations’ long term financial obligations. These liabilities are due with tenure over one calendar year, and thus do not require immediate clearance. However, proper planning is required to repay the amount without defaulting it when the due date passes by.
The long term debts are listed separately to get a better idea of the company’s current liquidity. Long term liabilities help in the management of a business using financial ratios. These debts are covered using returns from investment in future, primary business income, and cash from fresh debt inflows.
Some examples of noncurrent liabilities include bond payables, loan against equipment,machinery, or land, deferred tax liabilities, and other long term mortgages. The part of noncurrent liabilities that are due within a calendar year is listed as current portion of long-term debt in the balance sheets.
Owner’s Equity
(or Stockholders’ Equity for corporations)
The owner’s equity (often called the net worth) represents the value of a business once all its liabilities are subtracted from the assets it posses. The term “owner” is used for a sole proprietorship. The term stakeholder’s equity or shareholder’s equity is used if a business is structured as a corporation or LLC.
Owner’s equity = Assets - Liabilities
The owner’s equity includes the following:
Money invested by the business owner
Profit gains since inception of the business.
Minus token money extracted from the business
Minus the debt and other liabilities
Owner’s equity is not listed in the balance sheet of the company as an asset as it is an asset to the owner of the business and not to the company itself. In case the owner’s equity attains a negative value, the shortfall is required to be covered through additional investments.
Frequently Asked Questions
What are the four benefits of using a balance sheet?
1. Business Snapshot or the statement of financial position in terms of assets and liabilities
2. Determining risks and returns by analysing the short-term and long-term impact of your current financial condition
3. Securing loan and other capitals based on the businesses requirements and earning potentials
4. Providing financial ratios by understanding operational efficiency, profitability, and liquidity.
Why do we prepare a balance sheet?
A balance sheet helps in describing organization’s financial health insightfully and professionally. It reveals the liabilities and assets of a business to the interested parties,thereby giving an idea of the shareholders’ equity at any point in time.
Who uses a balance sheet?
Balance sheets are used by anyone interested in understanding the financial health of abusiness, including existing and potential investors, competitors, company management, and government agencies.
What makes a strong balance sheet?
A strong balance sheet goes beyond merely listing down assets and liabilities of a business. It possesses various attributes, including cash flow, working capital, income-generating assets, and a balanced capital structure.
What information is provided within a balance sheet?
A balance sheet consists of financial report of an organization’s assets, liabilities, and shareholder’s (owner’s) equity. It helps evaluate the capital structure of a business.
What isn’t included in a balance sheet?
Off-balance sheet items are assets and liabilities that are excluded from the balance sheets of an organisation. These are not directly owned by a business or are not in the direct obligation of a company.
What is another name for a balance sheet?
A balance sheet is often referred to with terms “statement of financial position” or “statement of financial condition” in financial accounting.
What is the balance sheet equation?
The fundamental equation of a balance sheet is:
Assets = Liabilities + Equity
What are the balance sheet and income statement?
A balance sheet represents a snapshot of an organization’s assets, liabilities, and shareholders’ equity at any particular point of time. An income statement talks about the company’s revenue and expenses during a specific period.
