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How to Analyze Your Financial Statements

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  Every company must draw up a balance sheet at least once during its 12-month financial year (generally at the end). The balance sheet is a summary document that presents the company's assets on a given date. This patrimony is composed, on the one hand, of the property owned by the company called the assets and, on the other hand, of its debts. It is important to ensure compliance with the presentation standard concerning the form of the balance sheet, i.e. check that we have the following: – The assets presented in descending order of liquidity (starting with the assets most easily convertible into cash). Thus, the appropriate order can be cash (cash, bank account, marketable securities, etc.), customer accounts, inventory (for those who have it), fixed assets – Liabilities, presented in ascending order of due date (starting with debts with the shortest maturities to the longest). Thus, the appropriate order may be short-term bank loans (line of credit), accounts pay...