Statement of financial position

• The statement of financial position shows the value of a business’s assets and liabilities at a particular time.
• Assets are those items of value which are owned by the business. They may be non-current (fixed) assets or (short-term) current assets.

  Liabilities are debts owed by the business. They may be non-current (long-term) liabilities or (short-term) current liabilities.
• Non-current assets are items owned by the business for more than one year.

  Current assets are owned by a business and used within one year.

  Non-current liabilities are long-term debts owed by the business, repaid over more than one year.

  Current liabilities are short-term debts owed by the business, repaid in less than one year.
• Working capital = Current assets – Current liabilities

  Capital employed = Shareholders’ funds + Non-current liabilities

  Shareholders’ funds = Total assets – Total liabilities