ビジネス英会話、MBA取得者のスキルアップ、ビジネススクールにこれから留学を検討している方、外資系金融機関への転職、金融・投資に関する知識を英語で学びたい方、M&Aなどについて基本を学びたい方に企業財務の基本諸表である貸借対照表（Balanace Sheet ）について英語で解説します。
Structure of Balance Sheet
Listen to the audio file and see if you can understand the explanation.
Balance sheet is one of the three fundamental financial statement besides P&L (Profit and Loss) Statement, Cash Flow Statement.
It describes the company’s total asset and how these asset were financed. Either through debt or through equity.
First thing you must understand when reading a balance sheet is that
right side and left side are balanced equally in the middle.
Looking at the following table Sum of Asset on the left side should equal to the right side to the Sum of Liability and Equity.
Right side represents the way how you financed your capital. Liability means you loaned money. Meaning that you must return them back at a predetermined schedule. On the other hand, Equity represents money that you do not have to return.
Left side represents how you spent. You either financed through borrowing or raised capital through equity for the purpose of proceeding your business. Your business needs certain assets such as say computers, copy machine and others. You must spent those capital in certain ways to process your business. These are described in the left side of the balance sheet.
Now, explain about Balance Sheet using your words back to me.
Let’s look at the components.
Components of Asset
Asset on the left side of the Balance Sheet is broken down into several components.
Current asset includes cash plus assets that are convertible to cash or can easily be sold during the fiscal period. We call this cash equivalent.
These are the assets that are directly related to business operation.
Fixed asset is an asset that firms use to operate their business. This component is broken down into two categories.
Property, plant and equipment are included in this category.
Goodwill, leaseholds, patent and rights are included in this category.
Investment and Other Asset
This component expresses all holding if investment and or loans made to other firms such as subsidiaries.
This component includes expenses such as Inaugural expenses, Stock or bond issuance costs and others.
Let’s listen to Liability
Components of Liability
Liability is devided into two categories. Current Liability and Fixed Liability.
Notes payable, Accounts payable-trade, short term loans payable are included in this category.
Bonds payable, Long term loans payable, Allowances of nature of liabilities are included n this category.
Let’s listen to equity. See if you can catch up.
Let’s listen to equity.
Components of Equity
There are 4 components n this category.
Capital Stock, Capital reserve, Legal Reserve of Retained Earnings, Other Surplus (or Loss) are included in this category.
Balance sheet is a very simple statement. The point that you need to concentrate is the risk of bankruptcy. If Liability>Equity, means all profit will pass through to banks.
The other point that is important is whether the financed capital is effectively used or not. To determine these points you need to look into the breakdowns.
i hope it helps