Balance Sheet

Keron Bhattacharya
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Keron Bhattacharya: Jay Consultancy Services

Chapter 7 in The New Frontiers for Business Analysis, 1987, pp 106-137 from Palgrave Macmillan

Abstract: Abstract For many managers as well as accountants, a balance sheet is nothing but a statement of assets and liabilities. Many even think that in a balance sheet the assets and liabilities should balance. This is far from the truth. The biggest element in the liabilities, the shareholders’ equity, is not a liability for the company but a balancing factor. The inclusion of shareholders’ equity in the balance sheet just happens to be convenient rather than scientific. Pragmatic Genoans who developed the mystery of double-entry book-keeping must be saluted for thinking of such an ingenious way to account for their business affairs. No Newton or Einstein would have accepted such a travesty in any of their scientific treaties.

Keywords: Cash Flow; Balance Sheet; Accountancy Profession; Borrowing Cost; Business Analysis (search for similar items in EconPapers)
Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-08612-2_8

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DOI: 10.1007/978-1-349-08612-2_8

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