What is Fundamental Analysis?
Value Investing
Introduction To Financial Statements
Statement Of Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement Of Changes In Equity

Statement Of Financial Position


The Statement of Financial Position which is also known as the Balance Sheet shows the financial position of a company at a particular point of time. The statement shows the company’s assets and liabilities as at the end of the financial period.

Assets are economic resources that are owned and possessed by a company to generate positive economic value, and could be tangible or intangible.  In other words, assets represent ownership of value that can be converted into cash.  The total assets are composed of non-current assets and current assets. Examples of non-current assets are property, plant and equipment, investment properties, biological assets, intangible assets, long term financial assets, long term deposits and other non-current assets.  Current assets consist of inventories, receivables, short term financial assets, deposits, bank and cash balances and other current assets.

Liabilities are obligations of a company arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.  The total liabilities are composed of non-current liabilities and current liabilities. Non-current liabilities consist of long term borrowings, derivatives, deferred tax liabilities and other non-current liabilities. Current liabilities consist of short term borrowings, derivatives, payables, other current liabilities and liabilities classified as held for sale.

The Net Assets figure can be used as a measure to determine the value of a company. Theoretically, it tells how much a company would be worth after all of its liabilities have been deducted from assets.  The Statement of Financial Position presents the Net Assets figure which is the assets net of all liabilities currently held by the company. The Net Assets are shown as the balancing figure on a company’s Statement of Financial Position, which is the same figure as the Shareholders’ Equity.  Net Assets are also known as “Net worth” or “Shareholders’ Equity”.