Sample Balance Sheet

Provides you with a snapshot of your business at a specific time, such as the end of the year. It keeps track of your company's assets, or what the company owns (including its cash), and the company's debts, or liabilities (generally loans from others). It also shows the capital, or equity, put into the business. This balance sheet is an example of a statement for a small, hypothetical food manufacturer called F.E.D. Foods Company. ****************************************************************

F.E.D. Foods Co. Balance Sheet

As of December 31, 1993 1992
($Thousands)
---------------------------------------------------------------- Assets
Current Assets
1. Cash $ 3 $ 2
2. Marketable Securities 8 12
3. Accounts Receivable 42 33
4. Inventories 157 150
5. Prepaid Expenses 2 3
--- --- 6. Total Current Assets 212 200
7. Plant, Property, and Equipment 1,067 983
8. Less Accumulated Depreciation 450 417
--- ---
9. Net PPE 617 566
10. Investments 267 217
11. Other Assets 16 17
--- ---
12. Total Assets 1,112 1,000

Liabilities
Current Liabilities
13. Accounts Payable 38 42
14. Notes Payable 80 66
--- ---
15. Total Current Liabilities 118 108
16. Long-Term Debt 0 0
17. Deferred Tax Liability 77 67
--- ---
18. Total Liabilities 195 175

Capital
19. Common Stock 367 327
20. Retained Earnings 550 498
--- ---
21. Total Liabilities and Capital 1,112 1,000
----------------------------------------------------------------- A Profit and Loss Statement

Shows the profit or loss for the year. The profit and loss statement, also called the income statement, takes the sales for the business, subtracts the costs of goods sold, then subtracts other expenses. This is a profit and loss statement for F.E.D. Foods Company.

F.E.D. Foods Co.
Profit and Loss Statement (Income Statement)

Years Ended December 31, 1993 1992
($ Thousands)
----------------------------------------------------------------
a. Net Sales $ 633 $ 500
b. Cost of Goods Sold 358 300
--- ---
c. Gross Profit 275 200

d. Selling and Administrative Expenses 27 20
e. Lease Payments 17 12
f. Depreciation 50 42
g. Repairs and Maintenance 17 18
--- ---
h. Operating Profit 164 108
Other Income (Expense)
i. Interest Income 3 1
j. Interest Expense 0 0
--- ---
k. Earnings Before Income Taxes 167 109

1. Income Taxes 57 37
--- ---
m. Net Earnings 110 72
--- ---

A Statement of Cash Flows

Presents the sources of cash in your business--from net income, new capital, or loan proceeds--versus the expenditures, or uses of the cash, over a specified period of time. An example of the cash flow statement for F.E.D. Foods Company is shown below.

It's at this stage that you will appreciate having an effective accounting system. Without this system, you won't know if you are profitable or not, let alone if you are liquid enough (simply put, have enough cash on hand) to pay for the next order of merchandise. A good system also will help you track your company's growth and anticipate future cash needs.

F.E.D. Foods Co. Cash Flow Statement
($ Thousands) Sources/(Uses)
----------------------------------------------------------------- Operating Activities
Net Income $ 110
Plus: Depreciation 50
Decrease in Prepaid Expenses 1
Increase in Deferred Tax Liability 10
---
171
Less: Profit on Sale of Equipment (25)
(line 9(1992) + Note I - f - 9(1993) - Note 2) Increase in Inventories (7)
Increase in Accounts Receivable (8)
Decrease in Accounts Payable (4)
---
Net Cash Provided From Operating Activities 127
Investing Activities
Capital Expenditures (167)
Increase in Investments (50)
Proceeds From Sale of Equipment 92
---
Net Cash Provided From Investing Activities (125)
Financing Activities
Proceeds From Sale of Stock 40
Proceeds From Notes 13
Dividends (58)
---
(Line m (1993)- change in line 20 (1992-1993) Net Cash Provided From Financing Activities (5)
Increase in Cash and Marketable Securities (3)
---

Notes: 1. Capital Expenditures in 1993 were $167,000.
2. Equipment sold in 1993 for $92.000.

Reprinted with permission of Tracy L. Penwell, Tuko Fujisaki, Publication Productions and the Federal Reserve Bank of New York.

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