How do you read this balance sheet?
Liabilities: where the money comes from. The company has been financed by:
Equity of 50,000 EUR, of which 40,000 capital provided by the shareholders and 10,000 EUR reserves from past profits.
Debts of 50,000 EUR, of which 5,000 EUR needs to be repaid within a year.
Assets: where the money goes to. This company has invested its money in:
Fixed assets, of which 10,000 EUR intangibles (patents) and 50,000 EUR tangibles (building).
Current assets, of which 15,000 is tied up in the inventory; 10,000 EUR due from customers who haven’t paid their invoice yet, and 15,000 on the bank account.