Assets and liabilities - a tool for assessing the performance of an enterprise

The balance of the organization is its assets and liabilities. And these two indicators are in close relationship. The sum of all the assets of an enterprise is always equal to the value of its liabilities and this balance balance equals balance. Those. With an increase in one of the indicators, the second increases by the same amount.

What is the assets and liabilities of the enterprise? Assets are the property and various resources of the organization, which can be expressed in monetary terms. They are used to make a profit. There are several types of them: current, long-term, intangible, and also financial investments.

To current assets it is possible to carry the money which is on the settlement account or in the cash desk of the company. Long-term production facilities and equipment. Intangible assets are the intellectual property of an enterprise, and financial investments are investments that can not be used for the needs of the company in the near future, but in the future can bring him significant profits.

Liabilities are the company's existing capital, as well as all liabilities of the firm. They are composed of all the production costs, borrowed funds and other debts of the institution. The liabilities include authorized capital, accounts payable, as well as the profit of the organization.

In order to analyze assets and liabilities at the enterprise, a balance sheet is compiled after a certain period of time . On the basis of these indicators, it allows us to assess the current state of the firm and, if necessary, take measures to improve its performance.

Analysis provides the opportunity to manage the assets and liabilities of the enterprise to maintain its profitability and reduce possible risks. Such management helps to properly allocate funds within the company, attract loans, and also facilitates timely financial investments in fixed assets.

Analyzing assets and liabilities, it is possible to identify the amount of current and permanent assets, the number of own and attracted funds, the dependence of the enterprise on borrowed resources, as well as the urgency of their repayment and other liabilities of the organization. That is, with their help you can assess the state of the company at the time of the analysis.

When assessing the financial condition of a firm, assets and liabilities are analyzed in absolute and relative terms. And also the temporary (comparison of reporting data with the previous period) and structural (revealing the influence of each indicator on the overall result) are conducted. Based on the results of the work carried out, further activities of the organization are planned.

Analysis of assets and liabilities of balance sheet accounts plays an important role in assessing the financial performance of an enterprise. It allows you to find shortcomings and make adjustments to the work of the company in order to increase its profitability. He also helps to plan the economic activity of the organization depending on certain economic factors.