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The Interactive Balance Sheet

TSC Staff

This feature and its companion, the Interactive Income Statement, are designed to help beginning investors understand the basics of company financial statements and determine where potential trouble spots might occur.

Here's how it works: Click on a linked line item in the sample balance sheet below. Your browser must have JavaScript enabled in order to use this feature.

The line items highlighted were chosen because they're some of the first places the auditors go to ensure that a company is in compliance with Generally Accepted Accounting Principles. We also highlight some ways a company uses accounting that may be aggressive -- but still in accordance with GAAP. For each, we give the pitfalls a company can face, and the weapons you can use to identify problems.

		Assets Current Assets						Liabilities and Stockholders' Equity
		Cash and cash equivalents		22,500
		Accounts receivable		55,000				Current liabilities	93,000
			Less: allowance for doubtful accounts	4,500				Long-term liabilities	144,000
		Inventories		35,000
		Prepaid expenses		10,000				Total liabilities	237,000
		Other		66,000
		Investments
		Investment in company B		145,000				Stockholders' equity
		Property, plant and equipment
		Land		22,000				Paid-in capital	190,000
		Buildings and improvements		100,000				Retained earnings	101,000
			Less: accumulated depreciation	30,000	70,000
		Fixtures, furniture, and equipment		80,000				Total shareholders' equity	291,000
			Less: accumulated depreciation	20,000	60,000
		Intangibles						Total liab. and stockholders' equity	528,000
		Goodwill		35,000
		Other assets		8,000
		Total Assets			528,000