How do you read this balance sheet?
The liabilities shows where the company’s money comes from: 50,000 EUR from equity and 50,000 EUR from loans (debt).
The assets show where the money goes to: the company invested all this money in a building.
The company owns a 100,000 EUR building which has been financed by:
40,000 EUR of external equity, by capital provided by the shareholders.
10,000 EUR of internal equity, which come from retained profits of previous years.
A long-term bank loan of 50,000 EUR, of which 5,000 EUR needs to be repaid in less than 1 year.
Note that the company has capital and reserves but no cash.