Balance Sheet Glossary

Cash 

Money on hand in checking, savings or redeemable certificate accounts.

Receivables

A short-term asset (to be collected within one year) in the form of accounts or notes receivable, and usually representing a credit for a completed sale or loan.

Inventory

The stockpile of unsold products.

Current Assets

The sum of a firm's cash, accounts and notes receivable, inventory, prepaid expenses and marketable securities which can be converted to cash within a single operating cycle.

Fixed Assets

Long-term assets such as building and machinery, net of accumulated amortization-depreciation-depletion.

Total Assets

The sum of current assets and fixed assets such as plant and equipment.

Accounts Payable

Invoices due to suppliers within the current business cycle.

Loans/Notes Payable

Loan amounts due to suppliers within the current business cycle.

Current Liabilities

Measurable debt owed within one year, including accounts, loans and notes payable, accrued liabilities and taxes due.

Long Term Liabilities

Debt which is due in more than one year, including the portion of loans and mortgages that become due after the current business cycle.

Total Liabilities

Current Liabilities plus Long Term Liabilities such as notes and mortgages due over more than one year.

Net Worth

Current assets plus fixed assets minus current and long-term liabilities.

Sources and Uses

The Sources and Uses of Funds table tests the accuracy of the balance sheet and
distinguishes the sources of funds from their use. It is the basic worksheet preliminary to a formal cash flow statement examining the liquidity of a business. A multi-year industry benchmark common size balance sheet, which includes overlapped but not identical sets of firms in each year, is not well-suited for the presentation of a formal cash flow analysis.