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