Schedule Vi (Annexures).

In: Business and Management

Submitted By king990381
Words 10550
Pages 43
1.Abstract
The balance sheet is necessary because it shows what the business has (assets) and what the business owes against those assets (liabilities). The difference between the assets and the liabilities shows the net worth of the business. The net worth of the business is important in that it is a measurement of the time the business is expected to stay in financial power. The balance sheet also provides the business with information on how best it is able to pay its debts. Underwriters also use the information in the balance sheet (working capital) to assess the business' ability to finance its operations. The balance sheet is necessary for the managers. It assists the managers of businesses in making decisions regarding purchasing of equipments for the business. Business managers depend on the balance sheet to analyze whether buying certain equipment on debt is the right move for the business at that time. Business managers need the balance sheet so as to decide the best source of credit for the business at that time. The balance sheet shows the accounting equation in a physical representation. The balance sheet also shows the owner's equity for example, it shows the value of the stock and the number of shares outstanding. The balance sheet is also used by the government agencies to make sure that the business is complying with the set laws. It also provides information to any potential lenders of the business on the credit worthiness of the business.

When a group of people want to exchange their idea or discuss any issue or even casual discussion, they first ensure that all of them understand the language through which they will converse. Similarly, all the investors, creditors or any stakeholders may not understand the typical financial implications. For their understanding a format was necessary to develop which will be uniform at least in India. This…...

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Title Vi

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