Balance Sheet
Currency units, year-end balances
| Line item | 2025 | 2026 | Change / note |
|---|---|---|---|
| Assets | |||
Cash The cash flow statement must explain this movement. | |||
Accounts receivable Operating asset. Increase usually reduces operating cash flow. | |||
Inventory Operating asset. Increase usually means cash is tied up in stock. | |||
Prepaid expenses Operating asset. Increase means cash was paid before the expense fully hit the income statement. | |||
Property, plant & equipment, net Use the PP&E roll-forward below. Do not call this simply net fixed assets. | |||
Intangible assets, net Use amortization to infer purchases of intangible assets. | |||
Long-term investments The net change hides both purchases and sales. | |||
Total assets | 197,000 | 251,000 | 54,000 |
| Liabilities & Equity | |||
Accounts payable Operating liability. Increase usually improves operating cash flow. | |||
Accrued wages payable Operating liability. Wages were expensed before being fully paid. | |||
Income taxes payable A decrease means more cash tax was paid than tax expense recognized. | |||
Long-term debt Debt increase is financing cash inflow on a net basis. | |||
Owner capital Additional owner contribution. | |||
Retained earnings Ending RE = beginning RE + net income - owner distributions. | |||
Other reserves / revaluation & FX Non-cash equity movement from PP&E revaluation and FX/consolidation effects. | 0 | 3,000 | 3,000 |
Total liabilities & equity | 197,000 | 251,000 | 54,000 |
Opening PP&E, net | 82,000 | — | Opening balance |
Depreciation expense | — | Non-cash reduction of PP&E | |
Net book value of equipment disposed | — | Equipment sold during the year | |
Impairment of PP&E | — | Non-cash write-down | |
Upward revaluation | — | Non-cash increase through OCI / equity reserve | |
Business combination: acquired workshop | — | PP&E acquired through buying another business; exclude from CapEx | |
FX / consolidation effect | — | Non-cash translation or consolidation effect | |
Closing PP&E, net | — | 96,000 | Balance sheet value |
Acquisition of small workshop, net of cash acquired | — | Separate investing cash outflow; do not count as CapEx | |
Equipment sold: net book value | — | Use with gain on sale to derive proceeds | |
Purchase of long-term investments | — | Cash outflow | |
Sale of long-term investments | — | Cash inflow | |
Sanity check: total operating cash flow + investing cash flow + financing cash flow must equal the cash movement of 7,000.