Outside Liabilities Total of the liability side of balance sheet minus net worth 25 Tangible Net Worth Total

tangible assets minus total outside liabilities. Owner's funds minus Intangible & Fictitious assets ; Paid up
capital plus reserves minus intangible assets 26 Gross Working Capital Total of Current Assets 27 Net
Working Capital Current assets minus total current liabilities or Long Term Sources minus long term uses
28 Working Capital gap Current Assets minus current liabilities other than Bank Borrowings. 29 Long
term sources Paid up capital, reserves and surplus (excluding specific reserves) i.e. Net Worth and long
term liabilities. 30 Short Term Sources Current Liabilities 31 Long Term Uses Fixed Assets, Miscellaneous
or Non. current assets, Intangible and Fictitious Assets (assets other than current assets) 32 Short Term
Uses Current Assets 33 Contingent Liabilities Likely liability which may or may not arise on the happening
or non happening of an event (i) As per RBI guidelines, installments of term loans due within 12 months
are not to be treated as current liability for calculation of Net Working Capital and Working Capital Gap.
(ii) Overdue instalments and Interest on term loan is treated as current liability. (iii) Sundry Debtors/
Book debts older than 6 months are treated as Non current assets. (iv) Loans from friends and relations
are normally treated as Long term liability but if these are secured by Demand Promissory Note i.e.
payable on demand then the same should be treated as Current Liability. (v)Reserves except which are in
the nature of provisions like Depreciation Reserve are part of net worth. Liabilities Assets Compiled by
Sanjay Kumar Trivedy, Divisional Manager , Govt. Link cell, Nagpur 147 | P a g e Net worth/Equity Funds
brought in by the promoters as their investment in business or generated by and retained in business
Share capital/partner's capital/ Paid up equity share capital,/owners funds Reserves & Surplus e.g.
General Reserve, Capital Reserve, Revaluation Reserve and Other Reserves),Retained Earnings
Undistributed Profits,Preference share capital (not redeemable within 12 years) Fixed Assets :Assets
which are purchased for long term and not meant to be sold but used for production. Land &
Building,Plant & Machinery Vehicles,Furniture & Fixture Office equipment,Capital Work in Progress
These are represented as under: Original value (Gross Bock) Less depreciation Net Block or book value or
written down Value Method Long term liabilities: Liabilities which are not due for payment within 12
months from the date of the Balance Sheet) Term loans from financial institutions; Term loan from
banks; Debentures/Bonds; Deferred payment liability;Preference Shares redeemable within 12 years;
Fixed Deposits maturing after one year; Provision for gratuity; Unsecured Loans Non Current Assets:
Assets which cannot be classified as current or fixed or intangible assets Book Debts or Sundry Debtors
more than 6 months old/ Disputed Debts, Investment of long term nature in shares, govt. securities,
associates or sister firms or companies. Long term security deposits. Unquoted investments; Investments
in subsidiaries or sister concerns; Loans & Advances to directors, officers; Accounts receivables in respect
of sale of plant & machinery; Advances to concerns in which directors are interested; Deposits with
customs port trust etc Intangible & fictitious Assets Which do not have physical existence. For example:
Goodwill, Patents, Trade Mark, Copy Right, Preliminary or pre operative expenses, other formation
expenses, debit balance of P & L account, accumulated losses, bad debts, Capital issue expenses e.g.
discount on issue of share & debentures, commission on underwriting of shares & debentures; Deferred
revenue expenditure e.g. Advertisement Short term for CurrentyLiabilities Liabilities which are due for
payment within 12 months from the date of the balance sheet and are to be repaid out of proceeds of
current assets,Short term borrowings from banks (C/C, 0/D or B/P, B/D limits) for working
capital.,Sundry/trade creditors/creditors/ Account payable,Bills Payable / trade acceptances Fixed
Deposits from public payable within one year,Short duration loans or deposits Provision for taxation,
Proposed Dividends, Provision for bonus, unclaimed dividend. Deposits from dealers, selling agents etc.
Advance payments from customers, outstanding expenses and Accruals e.g. wages & salaries, rent;
expenses payable Current Assets : Cash in hand, Bank balance including fixed ,deposits with banks.
Stocks/inventory (such as raw material, stock in process, finished goods, consumable stores and
spares),Book debts/Sundry debtors/Bills Receivable/ Accounts receivable/ debtors, Government and
other trustee securities (other than for long term purposes e.g. sinking funds, gratuity funds etc.),Readily
Marketable/quoted govt. or other securities meant for sale,Interest accrued and receivables,Advance
payment of taxes, pre-paid expenses,Advance payments for merchandise; unexpired insurance TOTAL
TOTAL RATIO ANALYSIS How ratios are expressed : Ratios can be expressed in the following d