In this video together we look at an example balance sheet and break this down by category.

Firstly we start with the assets section focusing on the non-current assets where I break down the difference between a tangible asset such as land and buildings and a non-tangible asset such as Goodwill and customer listings.

Next we move onto current assets due in less than 12 months such as Stock, Prepayments, Trade Debtors / Receivables, Cash at bank and Cash in hand and what all of the various current asset terminology means so that you can get a good understanding of the different types of assets and what the terms above are referring to. Here I also discuss liquidability on the balance sheet.

Then we move onto the current liabilities where I discuss accruals, trade payables, VAT liabilities, corporation tax liabilities and other liabilities that you may see sat on the balance sheet.

Finally we move onto non-current liabilities which includes the likes of loans due more than 12 months or accruals due in more than 12 months for example.

At the end of a balance sheet there is a section often referred to as the capital and reserves or equity. Here you will find any shares and profit or loss carried forward otherwise known as retained earnings carried forward. Here I also break down those terms for you so that you can gain a better understanding of what they relate to.

I hope you find this video useful but if you have any questions about the balance sheet just pop them below.

Legal Disclaimer - This video and any publication made by myself are not intended to serve as a substitute for consultation with a professional. Please do consult a professional if you have any queries around investing or financial matters, this video is for entertainment purposes only and should not be construed as advice in any format.