Financial record keeping

AssetsCurrent Assets

a) Items that are tangible and can quickly be converted to cash or that will be sold within12 months

Examples are … cash on hand, checking and savings accounts, stocks, money others owe you, current non-depreciable inventory, livestock, crops and feed

• Non – Current Assets (Long term)a) Items that have a useful life of more than one

year and are used in the business – b) Examples… non-current , non depreciable

inventory, land

Intermediate Assets – depreciable inventory

Examples .. Machinery, equipment , breeding livestock, cash value of insurance, personal vehicles, household goods

LiabilitiesCurrent Liabilities – accounts and notes

payable, this year’s part of non-current liabilities

Non – current liabilities – mortgages and other debts not due this year

Total liabilities = current liabilities (debts) +

non – current liabilities (debts)

Net Worth or owner’s Equity =total assets minus total liabilities

• Debt-to-Equity Ratio = total liabilities /net worth