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Fashion and Textiles Technology
Commerce 1.3 Summary
powerpoint 1-7
powerpoint 1
Video to explain balancesheet: (https://www.youtube.com/watch?v=eIjCaeNm-Vk )
The balance sheet is a picture of the company's financial situation. On the debit side it
shows what the company has invested in, and on the credit side it shows how this is
financed.
balance sheet reveals a companies:
debit:
→ assets =
- fixed assets: not so liquid assets, like machinery, real estate, vehicles etc)
- current assets: any assets that can be easily converted into cash within one
year, the most liquid assets, for instance cash(equivalents), accounts
receivables (money owned to business for purchases made by customers)
credit:
→ owners equity = stockholders equity, eigen vermogen
- share capital: stock issued as part of the initial or later-stage investment in the
business (Dit zijn aandelen die zijn uitgegeven als onderdeel van de initiële of latere investering in het
bedrijf. )
- retained earnings: earnings reinvested in the business after the deduction of
any distributions to shareholders such as dividend payments (Dit zijn winsten die
opnieuw in het bedrijf worden geïnvesteerd na aftrek van eventuele uitkeringen aan
aandeelhouders, zoals dividendbetalingen.)
1
,→ liabilities = can be divided in
- long term liabilities: any debts that are due more than one year from current date
- mortgage loan: long term loans secured by property (land/building)
- bonds: certificate that represent money a company has borrowed and is
obliged to pay back at a later date with interest
- short term liabilities: loans payable within a year
- accounts payable: all short term obligations owed to creditors and suppliers
- notes payable: money owed on short notice, bank notes, vehicle payments etc
- bank current account: short term loan with overdraft; allows company to continue
withdrawing money even if the account is empty
investment: locking-up financial means in fixed or current assets
investment plan: overview of expected need for capital due to fixed and current assets for a
future period
financing plan: overview of the way the need of capital will be financed by owner's equity
and forms of liabilities for a future period, shows use of capital
is owners equity an asset or liability? → liability to the owners of company
Bank Loans can be on the debit as well as on the credit side of the Balance Sheet. Look at
the example Balance Sheet.
On the credit side: the Bank Account is a Debt. It reflects the amount of credit withdrawn
from the account.
On the debit side: the Bank Account is an Asset. It reflects the amount of temporarily
superfluous financial means booked on the account (carrying interest and the ease of
booking).
2
, powerpoint 2
cost: usage & depreciations (waardevermindering, afschrijving), → you don't pay for it
directly but your product does get less valuable so its a cost
Durable production means = DPM Fixed asset = use it for more than one year
When you start using DPM you start making costs.
expenditure: uitgave/investering. For example: purchase price car is 40.000$ , purchase
price is investment and NOT COST (usage cost)
Expenditure is not the same as the cost because the company makes costs when they use durable
production means and the DPM is the same as fixed assets. If I need to invest then we talk about an
expenditure and not a cost. Once you start using it and value lowers it becomes a cost
both: salaries, this is a cost but also an investment revenues: sales on credit (klarna etc),
pay in terms (termijnen)
receipt: loan, you borrowed money, you dont get a product but money you can use to grow
both: sales on cash,
3
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