TopicConstruction of balance sheet using ratios.
PostedTue, Sep 10th 2019 15:39 PM
Retained earnings are a little different. Remember the formula for the balance sheet? (Assets = Liabilities + Equity?) If you’ve filled out the rest of your balance sheet template, then you will have only retained earnings left to work with. Therefore, retained earnings are equal to Assets – Liabilities – Contributed Capital.
A balance sheet helps individuals and business owners understand where their finances stand during a specific time period. A person reading a balance sheet can learn a lot about a business and its viability.