MGMD01H3 Lecture Notes - Balance Sheet, Overdraft, Current Liability
Document Summary
One way to determine wealth or financial standing is to consider: Balance sheet: shows the quantity (value) of your material possessions. Balance sheet is like a snap shot. Through the liabilities and equity- shows if its bought by taking out a loan or by selling things. Balance sheet shows all the things that a business owns. Balance sheet shows what you got, and where you got the money to pay for these things. Current asset- hope to turn into cash in under a year. Current liability- must pay in under a year. Overdraft is a synonym for line of credit. Why it matter: at the end of the day- we want 11297. Machinery and buildings are a store of 11297, but. Liquidity- the ease and speed with which an asset can be converted into cash cant be used to buy things.
