Liabilities are classified into short-long term depending

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Reference no: EM131533167

Based on the reading below Would patents be listed as an asset? if so then where would they go in the balance sheet?

Being a investor my primary interest is to know whether my investment is safe or not?, Balance sheet gives state of affairs as on particular date i.e. position of the company by stating how much of capital (Including sources of such capital) and how such capital was invested in various assets, and from items in the balance sheet we can derive lot of ratios which gives the healthiness of company. Investor would look for profit for the current year, what is the rate of return and what is the amount of dividend that company would pay.

A company's financial statements - balance sheet, income and cash flow statements - are a key source of data for analyzing the investment value of its stock. Stock investors, both the do-it-yourselfers and those who follow the guidance of an investment professional, don't need to be analytical experts to perform a financial statement analysis. Today, there are numerous sources of independent stock research, online and in print, which can do the "number crunching" for you. However, if you're going to become a serious stock investor, a basic understanding of the fundamentals of financial statement usage is a must.

Balance sheets can be arranged in two forms: account form and report form. The account form lists all asset accounts on the left hand side of the balance sheet, and all liabilities and equity accounts are listed on the right-hand side. The report form lists all accounts in a downward sequence beginning with assets, liabilities, and ending with equity. Both assets and liabilities should be arranged according to their liquidity or purpose. Assets that are generally liquid and are expected to be held less than a year are listed under current assets. Assets that are permanent in nature or are expected to be used for a long period of time are listed under plant assets. Liabilities are classified into short and long term depending on their maturity.

Reference no: EM131533167

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