Post on 05-Jan-2016
Financial record keeping
AssetsCurrent Assets
a) Items that are tangible and can quickly be converted to cash or that will be sold within12 months
Examples are … cash on hand, checking and savings accounts, stocks, money others owe you, current non-depreciable inventory, livestock, crops and feed
• Non – Current Assets (Long term)a) Items that have a useful life of more than one
year and are used in the business – b) Examples… non-current , non depreciable
inventory, land
Intermediate Assets – depreciable inventory
Examples .. Machinery, equipment , breeding livestock, cash value of insurance, personal vehicles, household goods
LiabilitiesCurrent Liabilities – accounts and notes
payable, this year’s part of non-current liabilities
Non – current liabilities – mortgages and other debts not due this year
Total liabilities = current liabilities (debts) +
non – current liabilities (debts)
Net Worth or owner’s Equity =total assets minus total liabilities
• Debt-to-Equity Ratio = total liabilities /net worth