How_Money_Works_-_The_Facts_Visually_Explained

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PROFIT-MAKING AND FINANCIAL INSTITUTIONS

Corporate accounting

Fixed assets
Intangible assets 0 0
Tangible assets 2 ,16 7.1 2,069. 2

Investments – –

Current assets

Stock and work in progress 7. 0 6.3
Debtors 162.6 153.9
Cash at the bank and in hand 181.0 211. 0

Total current assets 350.6 371.2

Creditors—amounts coming due within one year (198. 8) (171.7)

Creditors—amounts coming due after more (1,891.5) (1, 811.9)
than one year
Provisions for liabilities and charges (114 .9) (115. 3)

Retirement benefit obligations (93.1) (83.0)
Deferred income (17. 2) (17.9)

Stockholders’ equity
Issued share cap 81.3 81.3
Retained profit (or earnings) 120.9 159. 3

Net assets 202.2 240.6

Shareholders’ funds 202.2 240.6

Net current assets 151.8 199.5

Total assets less current liabilities 2,318.9 2,268.7

Ye a r 2013

$m

Ye a r 2012

$m

ASSETS, LIABILITIES, AND CAPITAL

Current assets include all assets that could be

converted into cash—cash reserves within the

business and petty cash; stock; insurance claims;

office equipment; accounts receivable.

Debtors are individuals or companies that owe the

firm money. Debtors will usually have an agreement

with their creditors about terms of payment.

Fixed assets (or non-current assets) cannot easily

be converted into cash and are usually bought for

long-term use. They are either tangible, such as

land, or intangible, such as brand logos.

Creditors are the individuals or organizations to

which the company owes money. Here, the money

must be repaid in the current financial year.

Net current assets are current assets after money

due to creditors has been deducted.

Total assets less current liabilities are all the

assets that the company owns that are not likely to

be exchanged for cash, as well as cash, and other

liquid assets, minus liabilities.

Liabilities due are loans, mortgages, or

outstanding debt that the company owes,

and on which it is likely to have to pay interest.

Net assets are the company’s total assets minus the

total liabilities it has. It is the amount of value left

and is sometimes called shareholders’ equity.

Retained profit is profit that has not been paid

out as dividends to shareholders and may be

reinvested or used to pay debt in the long term.

Shareholders’ funds, or owner’s equity, is the

company’s remaining net capital; this can be

reinvested or paid out annually as a dividend.

Issued share cap is the total number of shares

held by the company’s shareholders.

Intangible assets are assets that are not physical—

for example intellectual property (IP) or trademarks.

They have a value but are distinct from tangible

assets such as stock, property, and premises.

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