Ayah Eca

Assets are anything which the firm owns or has title to (in other words ownership of). The term net then means all assets net of liabilities. Net assets are therefore:- NET ASSETS = Total Assets - Total Liabilities The total assets are made up of fixed assets (plant, machinery and equipment) and current assets which is the total of stock, debtors and cash. The total liabilities are made up in much the same way of long-term liabilities and current liabilities . The net assets figure therefore can be used as a measure of the value of the business. It is the value of everything the business owns after all the debts have been taken account of. For more detail of how this can be used as a measure of the value of a business try going to the theory section of the worksheet below. Source: http://www.bized.co.uk/

As we saw from the explanation of long-term liabilities, they are liabilities that the firm has which are due in over a year. There are various possibilities for this:- Debentures Mortgages Long-term loans Debentures A debenture is a form of borrowing by a firm. It may issue debentures of a fixed value - say £1000 or £5000 - at a certain rate of interest. These debentures may be bought by individuals or by financial institutions. The debentures will have a fixed time period, after which they will be paid back. This may be 5 or 10 years or in some cases even longer. In some cases they carry perks with them. Much of the new number 1 court at Wimbledon was funded by issuing debentures in return for which people get preferential deals on tickets. They are often attractive because they tend to be a secure investment, and because the interest will have to be paid, whatever the level of profit. This makes them less risky than ordinary shares. F...

What do you understand by the word " Asset? " Assets are items which are owned by a business or money which is owed to the business. If Pepe owned his pizza parlour then the building would be an asset of his business. Assets fall into two groups: Fixed Assets - These are items which have a life span of more than one year. They are usually items that the business expects to keep. Fixed assets include land and buildings, plant and machinery, fixtures and fittings and motor vehicles. These assets fixed because they are necessary for the business to trade but are not affected by the level of trade or the profit made. If a business purchases any fixed assets then this is known as capital expenditure. If Pepe decided to purchase a new delivery van then it would be a new fixed asset of the business. Current Assets - These are items which are much shorter term. The value of these items change in proportion to the amount of ...