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BizPlanBuilder v8.0

Balance Sheet Assumptions

INSTRUCTIONS FOR BALANCE SHEET

Figures used to compile the balance sheet are taken from the previous and current balance sheet as well as the current income statement. The income statement is usually attached to the balance sheet. The following text covers the essential elements of the balance sheet.

At the top of the page fill in the legal name of the business, the type of statement and the day, month and year.

Assets

List anything of value that is owned or legally due the business. Total assets include all net values. These are the amounts derived when you subtract depreciation and amortization from the original costs of acquiring the assets.

Current Assets

Cash - List cash and resources that can be converted into cash within 12 months of the date of the balance sheet (or during one established cycle of operation). Include money on hand and demand deposits in the bank, e.g., checking accounts and regular savings accounts.

Petty cash - If your business has a fund for small miscellaneous expenditures, include the total here.

Accounts Receivable - The amounts due from customers in payment for merchandise or services.

Inventory - Includes raw materials on hand, work in progress and all finished goods, either manufactured or purchased for resale.

Short - term investments - Also called temporary investments or marketable securities, these include interest- or dividend-yielding holdings expected to be converted into cash within a year. List stocks and bonds, certificates of deposit and time - deposit savings accounts at either their cost or market value, whichever is less.

Prepaid expenses - Goods, benefits or services a business buys or rents in advance. Examples are office supplies, insurance protection and floor space.

Long-Term Investments

Also called long-term assets, these are holdings the business intends to keep for at least a year and that typically yield interest or dividends. Included are stocks, bonds and savings accounts earmarked for special purposes.

Fixed Assets

Also called plant and equipment. Includes all resources a business owns or acquires for use in operations and not intended for resale. Fixed assets may be leased. Depending on the leasing arrangements, both the value and the liability of the leased property may need to be listed on the balance sheet.

+ Land-List original purchase price without allowances for market value.

+ Buildings

+ Improvements

+ Equipment

+ Furniture

+ Automobile/vehicles

Liabilities

Current Liabilities

List all debts, monetary obligations and claims payable within 12 months or within one cycle of operation. Typically they include the following:

Accounts payable - Amounts owed to suppliers for goods and services purchased in connection with business operations.

Notes payable - The balance of principal due to pay off short-term debt for borrowed funds. Also includes the current amount due of total balance on notes whose terms exceed 12 months.

Interest payable - Any accrued fees due for use of both short- and long-term borrowed capital and credit extended to the business.

Taxes payable - Amounts estimated by an accountant to have been incurred during the accounting period.

Payroll accrual - Salaries and wages currently owed.
Long-term Liabilities

Notes payable-List notes, contract payments or mortgage payments due over a period exceeding 12 months or one cycle of operation. They are listed by outstanding balance less the current position due.

Net worth

Also called owner's equity, net worth is the claim of the owner(s) on the assets of the business. In a proprietorship or partnership, equity is each owner's original investment plus any earnings after withdrawals.

Total Liabilities and Net Worth

The sum of these two amounts must always match that for total assets.

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