parallel balance sheet

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The balance sheet is one of the most important financial statements, as it provides a snapshot of the financial position of a business at any given time. Upon the balance sheet are items such as assets, liabilities and owner’s equity. A balance sheet can be broken down into two major parts; the horizontal style balance sheet, and the vertical style balance sheet. Knowing the differences can be helpful when analyzing a company’s financial position.

The Horizontal Style Balance Sheet is set up in simple table format, with two sequences of assets and liabilities. This type of balance sheet is commonly seen for companies that operate on a single-year basis. This method compares the two sides of a business (assets and liabilities), comparing the two to see whether or not the company is providing a return on capital. This format does not give much insight into the composition of a companys assets and liabilities.

The Vertical Style Balance Sheet, on the other hand, breaks down the assets and liabilities into more detail. This sort of balance sheet is used by companies that operate on a multi-year basis. It gives an in-depth look at the nature of a companys assets, liabilities, and owner’s equity. It gives an in-depth look at the type of assets and liabilities a company is holding (cash, accounts receivable, inventory, etc.). It also provides a breakdown of long-term liabilities and owner’s equity, along with the amount of retained earnings. By breaking down the items in the balance sheet into more detail, this format allows users to analyze the information in a more comprehensive way.

The horizontal style balance sheet is a simple datatable, making it easier for users to view the snapshot of a company’s financial position. As with other forms of reports and tables, it is important to use this format as a starting point, not an end result. The vertical style balance sheet provides the necessary detail for an in-depth look into a company’s financial position. Determining which style of balance sheet is best for an analysis is dependant on which information is sought.

In conclusion, it is important to understand the two basic types of balance Sheets. The Horizontal Style Balance Sheet is useful for obtaining a quick view of a companys financial position, while the Vertical Style Balance Sheet can be used to determine a more detailed analysis. Understanding both styles can be invaluable in making informed decisions when it comes to investing, or any other purpose.

Balance Sheet Dec. 31, 20XX Assets Liabilities Cash $40,000 Accounts payable $ 32,000 Accounts receivable 50,000 Loan payable 30,000 Supplies 8,000 Notes payable 40,000 Less: Allowance for bad debts (1,000) Total Assets $97,000 Total Liabilities $102,000 The balance sheet of ABC Inc. as of December 31, 20XX shows a total of assets valued at $97,000 and liabilities valued at $102,000. The current assets of the company are cash of $40,000 and accounts receivable of $50,000, less allowance for bad debts of $1,000. The companys liabilities consist of accounts payable of $32,000, loan payable of $30,000, and notes payable of $40,000. The companys supplies account has a value of $8,000. From the balance sheet, it is clear that ABC Inc. has more liabilities than assets. This means that the company is insolvent and is unable to pay its creditors. In order to keep the business afloat, ABC Inc. may need to restructure or liquidate its debts and assets. The company could sell some of its assets or take out a loan to pay its creditors. To improve the companys financial position, management should investigate ways to reduce costs, improve efficiency, and increase sales.