Balance sheet
Read your forecast balance sheet in bluprnts — what the business owns, owes and is worth at each point in the forecast, with a balance check that must read zero.
The balance sheet is a snapshot: what the business owns, what it owes, and what is left over for the owners, at each point in the forecast. Unlike the other two statements it does not measure a period — it reports a position, so its quarterly and yearly columns show the closing month of each period rather than a sum of it.
Open it on the Financials page, using the Balance Sheet option in the page header.
The balance check#
The bottom row is labelled Balance check and it must read zero. It takes total assets and nets off everything that stands against them — liabilities and equity. A balance sheet that doesn't balance isn't a balance sheet, so this row is the statement proving itself rather than a figure to interpret.
Under FRS 102 and IFRS#
| Section | What sits in it |
|---|---|
| Non-current assets | Things you keep — equipment, property |
| Current assets | Cash at bank, trade debtors, VAT receivable |
| Total assets | The two above |
| Current liabilities | Trade creditors, other creditors, VAT and duty payable, corporation tax, the current portion of loans |
| Non-current liabilities | Loans falling due after a year |
| Total liabilities | The two above |
| Equity | Share capital, opening reserves and retained earnings |
| Total equity |
Under US GAAP#
The same sheet ordered by decreasing liquidity — cash first, working down to the things hardest to turn into money — which is the opposite order to FRS 102:
Cash and cash equivalents → Accounts receivable → Prepaid expenses and other current assets → Total current assets → Property, plant and equipment, net → Total assets → Accounts payable → Accrued liabilities → Other current liabilities → Income taxes payable → Current portion of long-term debt → Total current liabilities → Long-term debt → Total liabilities → Common stock → Retained earnings → Total stockholders' equity → Total liabilities and stockholders' equity
In the Simple view#
Three plain blocks, with cash lifted to the top because it is the line most people came to read:
| Heading | What it gathers |
|---|---|
| Cash in the bank | Your closing bank position |
| Money owed to you | Trade debtors and VAT receivable |
| Equipment and property | Fixed assets |
| What you own | The three above |
| Money you owe | Everything due short-term except loans |
| Loans to repay | Borrowing, whenever it falls due |
| What you owe | The two above |
| Money put in and kept | Share capital and retained profit |
| What's left |
The KPI strip#
| Figure | What it means |
|---|---|
| Net assets | What the business is worth on paper, with the movement since the start underneath |
| Cash at bank | The closing position |
| Short-term cover | Current assets over current liabilities, as a multiple — "can cover near-term bills". Reads as a dash when nothing is owed short-term |
| Money owed | Total liabilities — loans and everything else |
| Working capital | Current assets less current liabilities — "headroom for day-to-day" |
Short-term cover below 1× means near-term bills exceed the assets available to meet them. It is the balance sheet's early warning, and it can turn red while profit still looks healthy.
Related#
- Opening position — the cash, debtors and creditors the sheet starts from.
- Add financing — where loans and share capital enter it.
- Cash flow statement — how the cash line got where it is.