Know your Balance Sheet

Which of the following is not categorised as Current Asset in a Balance Sheet?

• Inventories

• Bank Balances

• Plants and Machinery

• Trade Debtors

Current Assets are cash or other assets that are expected to be converted to cash within a year

• True

• False

Which of the following is a Non current asset?

• Furniture

• Other Receivables

• Trade payables

• All the above are or can be non-current assets

Non current liability are financial obligations that are due for settlement within 1 year. True or False

• True

• False

Equity is

• amount of finance provided by owners of the business and earnings

• amount of finance provided by the creditors

• amount of finance provided by the banks

• amount of finance provided by the inital owners

Which of the following equation is true?

• Total Asset = Current Asset + Current Liabilities

• Asset = Liabilities + Stakeholder's Equity

• Total Liabilities = Current Liabilities + Non Curent Liabilities + Equity

• Equity = Current Liabilities + Non Current Liabilities

Balance sheet provides critical information to a potential investors. Which of the following information or anaylsis can be derived from a balance sheet?

• Financial Strength

• Liquidity

• Equity Changes

• All of the above

Liquidity is a measure of the extent to which company is able to convert its cash or equivalent to meet its current financial obligations. True or False?

• True

• False

Which of the following is not a measure of liquidity?

• Working Capital

• Liquidity Ratio

• Cash Balances

• Dept to Asset Ratio

What is solvency?

• Ability to pay one's long term debts

• Abitlity to borrow more money for capital investemnt

• Ability to pay more dividends

• Ability to make profits