Using the Information on the Balance Sheet

  1. How can Accountants use the information on the balance sheet for decision making?
  2. What can the balance sheet tell us about the progress of the business?
  3. Check your readings for these formulas
  • Working Capital
  • The Current Ratio
  • Debt to Equity Ratio

Activity: Using the balance sheets prepared from the previous lessonĀ analyze these businesses using the above tools

Questions you will be able to answer:

  1. Which business would you lend money to? Support your answer using thee above calculations
  2. Which business do you think has the most opportunity for future expansion?
  3. Why is the current ratio a better way to compare companies?