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.
Download Free Balance Sheet Formats
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 sheet is
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.
Choose the format for your Balance Sheet:
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.
Choose the format for your Balance Sheet:
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.
Choose the format for your Balance Sheet:
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.
Choose the format for your Balance Sheet:
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.
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.
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Accounting Balance Sheet Format
An accounting format of a balance sheet records the company's assets, liabilities, and equities at a certain point in time. The accounting format provides a basis for estimating return rates and determining the capital structure. It shows what an entity owns, owes, and how much it spends.
There are two main divisions on the balance sheet. Equities and liabilities comprise the first portion, whereas assets comprise the second. Depending on how liquid their assets and liabilities are, accounts are categorised.
Many organisations utilise an accounting balance sheet style to condense their financial reports. It can assist in creating a better business and cost plan to raise a company's profitability.
Balance Sheet Format as per Companies Act 2013
Companies Act 2013 Balance Sheet Format prescribes the vertical format of the balance sheet to make the companies' financial statements. The balance sheet lists each asset and liability separately, divided into current and non-current categories. The notes to accounts must disclose the shareholder who owns more than 5% of the shares.
The liabilities show what the company owes to the stakeholders, and the assets demonstrate what the company owns. Both assets and liabilities can be long-term or short-term.
Long-term assets and liabilities are those that a corporation has for a more extended period than short-term assets and liabilities, which last shorter than a year.
Sources of funds like equity, preference shares, and debentures are shown at the top, followed by short-term and long-term debt. The use of the fund section involves all the company's assets, fixed and current.
Comparative Balance Sheet Format
Comparative balance sheets show a company's financial position for "two or more periods of the same company" or "two or more companies of the same industry." Business owners use comparative statements to compare the change, analyse the situation, and take appropriate action.
Comparing, analysing, and comprehending the company's performance and patterns helps investors and stakeholders make decisions. Comparing financial records reveals trends, understanding the results, and making appropriate decisions over time.
A comparative balance sheet is created by arranging the items in rows and years and amounts in columns. Given the comparative balance sheet's usefulness, most businesses with different business verticals prepare a close balance sheet compared with other business verticals.
Common Size Balance Sheet Format
A technique for analysing and understanding financial information is called a common sizing analysis (CSA). By examining each line item in terms of an amount of the basic amount at the time, this method helps assess the financial status of an accounting statement.
For the income statement, the base is the sales network. The basis for the account balance sheet is the entire asset value. Each line item on the income statement is shown as a proportion of total sales. Additionally, we allocate the value of each item on the balance sheet per the total assets.
Common size balance sheet format is useful for comparing the proportions of assets, liabilities, and equity between different companies, particularly as part of an industry or acquisition analysis.
Horizontal Balance Sheet Format
In a horizontal balance sheet, columns provide information about a company's assets, liabilities, and shareholder equity. There are two approaches to organising the accounting of assets and liabilities: based on liquidity or based on performance.
The assets are on the right side of the balance sheet, and the liabilities are on the left. The horizontal balance sheet format is laid out as follows from the left corner to the right corner:
- The first column lists the ending balance of all the liabilities and equity items.
- The second column contains numbers related to those liabilities and equity.
- The third column consists of the ending balance of all the assets.
- Lastly, the fourth column has the numbers associated with those assets.
Provisional Balance Sheet Format
A provisional balance sheet means a balance sheet subject to change or alteration. A corporation may have an interim balance sheet while it waits for the final evaluation of any equipment or real estate it owns. Alternatively, a balance sheet could be considered provisional because of future changes to the net income statement that will affect retained profits.
Provisional balance sheets are also known as unaudited balance sheets. Businesses use provisional balance sheets for two main reasons:
- When they need to prepare for financial audits, the provisional balance sheet ensures that there are no financial problems.
- When companies submit updated financial information, this is necessary for various factors, such as loan applications and investor updates.
Schedule 3 Balance Sheet Format
On October 11, 2018, Schedule 3 of the Companies Act 2013 was amended by the Ministry of Corporate Affairs (MCA). The format of financial statements for firms that adhere to Division I and II of the Companies Act 2013's Schedule 3 Balance Sheet Format according to Accounting Standards (AS) and Ind AS, respectively.
Schedule III of the Companies Act 2013 came into force on April 1, 2014. The schedule has three divisions:
Division I: Financial Statements for a business that must adhere to the Companies (Accounting Standards) Rules, 2006
Division II: Financial Statements for a business that has financial statements prepared per the 2015 Companies (Indian Accounting Standards) Rules
Division III: Financial Statements for a Non-Banking Financial Company (NBFC) that are prepared under the Companies (Indian Accounting Standards) Rules, 2015
Schedule 6 Balance Sheet Format
Every company registered under the Companies Act of 1956 must prepare a balance sheet, profit & loss statement, and notes as per Schedule 6. There have been numerous economic and regulatory reforms for businesses over the years.
The Ministry of Corporate Affairs released a new Schedule 6 Balance Sheet Format on February 28, 2011, to improve the disclosure requirements outlined in the previous version and comply with the announced Accounting Standards.
A corporation will no longer have a choice but to present financial statements in the horizontal style because Revised Schedule 6 solely recommends the vertical format. The Revised Schedule 6 has eliminated the concept of 'schedule,' Such information is now furnished in the notes to accounts.
Tally Balance Sheet Format
Tally balance sheet format records the company's capital and reserves, liabilities, and assets. Both sides of the balance sheet must tally. Because assets will always equal liabilities and shareholders' equity, the term "balance sheet" was coined.
It might reveal a company's capabilities and financial soundness. The Fixed Assets, Current Assets, Current Liabilities, and Capital & Reserves categories comprise the Tally Balance Sheet.
If the balance sheet is still out of balance, it must imply that at least one line on the balance sheet is shifting from one period to the next without a matching change in the cash flow statement or an offset change in the balance sheet.
Vertical Balance Sheet Format
The vertical balance sheet format is the arrangement of a company's balance sheet, with equity and obligations at the top and assets at the bottom. A vertical balance sheet format offers an accounting report in a single column of numbers.
The vertical balance sheet contains a single side, in which liabilities are on top, followed by the assets. The data is from top to bottom in the vertical format. Comparison of the vertical balance sheet is easy as it involves the past year's data.
Rounding-off is mandatory in vertical balance sheet format. The amount reported in the financial statements is rounded off based on the number of turnovers:
Turnover < Rs.100 crore: Nearest hundreds, thousands, lakhs or millions or decimal thereof;
Turnover > Rs.100 crore: Nearest lakhs or millions or decimal thereof.
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.
What is the new format of a balance sheet nowadays?
The vertical balance sheet is the new balance sheet format per the Companies Act 2013. It lists the equities and liabilities on the top, followed by the assets at the bottom. The new form is mandatorily applicable to all companies except insurance, banking, and electricity companies.
What are the essential terms used in a balance sheet?
The essential terms used in a balance sheet are Assets, Liabilities, Capital, and Shareholder's Equity.
How do I understand a balance sheet?
A balance sheet is a snapshot of the financial activities of the business. Assets are what you own, liabilities are what you owe, and capital refers to the company's finance.
How do you read the balance sheet of a company?
The balance sheet is broken into two main areas. The first section consists of equities and liabilities, and the second section includes assets. Accounts are categorised by the liquid status of their assets and liabilities.
What is the form of a balance sheet?
The form of the balance sheet is Assets = Liabilities + Owner's Equity. When the aggregate value of the liabilities and shareholders' equity equals the value of the assets, the balance sheet is in balance.
What items can I show on the balance sheet?
In the asset section, you can show items like cash, stock, debtors, investments, prepaid expenses, and fixed assets.
The liabilities include long-term debt, short-term debt, creditors, provisions for doubtful accounts, and outstanding liabilities.
The owner's equity contains share capital, retained earnings, and additional paid-up capital.
How do balance sheets work?
The balance sheet gives a summary of a company's current financial situation. The balance sheet follows the accounting equation Assets=Liabilities+Shareholders' Equity. It implies that a business must either borrow money to cover all of its assets (assuming liabilities) or raise money from investors (issuing shareholder equity).
What is the other equity in the balance sheet?
Any share capital except common shares, convertible securities, or options means other equity. It includes retained earnings, contributed surplus, treasury stock, additional paid-up capital, and other items.
Is a balance sheet crucial in a company?
Balance sheets are an essential piece of financial information. Every business owner must understand the balance sheet to monitor their company's financial health. Balance sheets with income and cash flow statements provide owners with the financial data necessary to make informed decisions.
How do I calculate total capital from a balance sheet?
Firstly, find the net value of all fixed assets. Next, add capital investments and current assets. Lastly, subtract the liabilities, and you will get the total capital. The formula for the same is Capital=Assets-Liabilities.
How to calculate the total liabilities from a balance sheet?
Liabilities=Assets-Owners Equity is the formula to find the total liabilities. You can also add long-term and short-term liabilities to find the total liabilities.
How to get sales on a balance sheet?
Sales are generally written in a trading account and are not a part of the balance sheet because a balance reflects what you have, not what you sold. However, sales affect the balance sheet because it generates revenue, thus increasing the company's assets.
What is an asset on the balance sheet?
An asset is something that a company owns with the expectation it will provide financial benefits in the future. The classification of assets includes tangible and intangible assets. Further, there are two types of tangible assets: current and fixed.
What are the different types of balance sheets?
There are several types of balance sheets available. The most common formats are common-sized, comparative, and vertical balance sheets.
What is the balance sheet equation?
The balance sheet adheres to the following equation: Assets=Liabilities+Owner's Equity. Both sections of the balance sheet must tally.
What is an expanded balance sheet?
The separate elements of owner's equity, such as dividends, shareholder capital, revenue, and expenses, are included in the expanded accounting balance sheet. The extended equation can compare a company's assets at a more acceptable level than the basic equation.
Why should liabilities be equal to assets on a balance sheet?
The Accounting Equation's left and right sides are always equal because every asset a business owns has been acquired solely from the funds its owners and creditors supply. If both sides do not tally, the report is not accurate and fair.
Is profit an asset or a liability on the balance sheet?
On the balance sheet, any profits not paid out as dividends are shown in the retained profit column. Any profit or net income belongs to the owner of a sole proprietorship or a corporation's stockholders.
Capital in the balance sheet is an opening capital or closing capital?
The balance sheet shows the closing balance of the capital.
How many sides are there in a balance sheet?
There are two sides to a balance sheet: assets on the left and liabilities on the right. Further, both sides have their sub-classification.
Why is capital shown on the liabilities side of the balance sheet?
The capital invested in a business has a credit balance and is listed on the liabilities side of the balance sheet since it is used to pay off all obligations accrued.
Why does the balance sheet always tally?
The double entry principle in accounting is the main factor causing a balance sheet to tally. Since every transaction is recorded in at least two different accounts, this accounting system also serves as a check to ensure that the entries are accurate.
What if your assets, liabilities, and owner's equity aren't equal?
The assets of your business should equal the liabilities and equity of your business on the balance sheet. If it does not tally, your balance sheet is not balanced and has some mistakes.
On whose behalf do we create a balance sheet?
Executives, investors, analysts, and regulators utilise the balance sheet as a crucial tool to comprehend the current financial condition of a corporation. It frequently coexists with the income and cash flow statements, the other two categories of financial statements.
Why is revenue not included in a balance sheet?
The balance sheet does not include revenue because the profit and loss statement records the income. The P&L tracks how much money the company makes or loses.
Why do businesses use balance sheets?
A balance sheet is valuable for all the stakeholders to make informed decisions. In addition to listing the company's assets and liabilities, a balance sheet provides interested parties with information about the company's financial status.
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