The balance sheet currency is an economic obligation that any organization has at the reporting date. First of all, economic obligations arise for persons who have an economic interest in the affairs of the organization.
The balance sheet currency is responsible for matching the active and passive part of the economic resources that are currently in the enterprise with the total amount of real financial resources allocated by creditors and owners. Capital and the passive part of the balance sheet are distinguished by the nature of obligations to third parties and owners, the urgency of payments and the repayment procedure.
Unfortunately, the balance sheet currency is not a real reflection of the funds available to the organization. The reason for this is the value of assets that does not match the real market value.
In order for the balance sheet currency to have a real definition, it is necessary to fill out the appropriate accounting forms. From them we can conclude the reality of assets. The clearest picture appears after filling out the income statement in the form of No. 2 statements.
In the analysis of financial statements, the emphasis is on the scope of the proposed borrower. Therefore, for a generalized analysis, it is necessary to look at balance sheet items that are directly related to its core business. It will also be useful to analyze the receivables and payables in terms of its structure and quality.
When conducting monitoring of financial statements, it is necessary to evaluate its structure. There is no doubt that the balance sheet currency can be done according to the data of assets and liabilities. The next step in creating a complete picture of the potential borrower is the calculation of the coefficients that will characterize its main indicators of financial stability, business activity, liquidity, profitability and subsequent profitability. If necessary, an analysis is also carried out of other indicators specific to the scope of the potential borrower.
Any company or organization can increase its balance sheet currency. In various industries, there are various operations that will help increase this indicator.
For example, the currency of a bank balance can be increased due to the growth of deposit funds in bank accounts and the number of loans issued. This indicator can also be increased by increasing the authorized capital, which will be responsible for liabilities, and increasing the number of loans issued or investments in various securities will correspond to the asset.
Each type of funds both in assets and liabilities is one of the balance sheet items. To calculate the total, you need to compare the asset balance at the beginning of the year and at the end. The resulting data will be equal to the total liability. So the currency of the balance is displayed - this is its total value. And equality of outcomes will be crucial. Accounts are checked in this way to identify unintentional errors. Therefore, all business operations conducted by the enterprise have a direct impact on the balance sheet currency. They can lead to both an increase in the value of the liability and the asset. In rare cases, item changes occur simultaneously. Therefore, when there is a question of increasing the balance sheet currency, this must be done through the following operations:
movements - they contribute to changes within the balance sheet asset;
change of purpose due to changes in the balance sheet liability;
investments, due to which the overall results change - they increase both in assets and liabilities;
withdrawals - occurs due to a change in the direction of decrease in the overall results of the liability and asset balance.
When these operations are carried out at the enterprise, it should be borne in mind that the liability and balance sheet assets will ultimately consist of the total amount of all the items representing them and each of them has its own code reflected in the standard reporting. When filling out articles, you can choose the best way to solve the problem to increase the balance sheet.