Details

23 mins, 2001

Jay expands his financial enlightenment.

The profit and loss account (as described in The Basics Of Finance I: Are We Making A Profit) tells him a lot, but only the balance sheet will reveal to him the overall “financial health” of his company.

Jay’s friend takes him through the balance sheet explaining the key terms: fixed/current assets, current/long-term liabilities, creditors & debtors.

She also shows him how to extract some basic financial information from the balance sheet. Finally, Jay learns about the fundamental importance of solvency and working capital.