The balance sheet (statement of financial position) is one of the financial statements used in assessing a supplier’s financial stability. The balance sheet contains information on such items as …
A.
Cash receipts from customers
B.
Operating expenses and net profit
C.
Liquidity ratios, return on capital employed and gearing
D.
Short-term liabilities (e.g., unpaid taxes and bank overdraft)
A balance sheet sets out assets, liabilities and equity at a point in time. Current (short-term) liabilities such as overdrafts and tax creditors are part of it. Cash receipts (A) sit in cash-flow statements; expenses and profit (B) are in the income statement; ratios (C) are derived metrics, not items on the statement.
[Reference: CIPS L4M4 Study Guide (v2): LO “Application” – supplier financial appraisal; interpreting the statement of financial position., ===========, ]
Contribute your Thoughts:
Chosen Answer:
This is a voting comment (?). You can switch to a simple comment. It is better to Upvote an existing comment if you don't have anything to add.
Submit