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Proformas & Annual Reports |
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Page 2 of 5 Balance Sheet
The balance sheet identifies what is owned by the company and by whom. Assets always equal liabilities & owners equity. Liabilities & owner’s equity represent who owns those assets. Creditors have claim to the accounts payable (suppliers), current debt (bankers), and long term debt (bondholders). Stockholders have claim to the common stock. Management controls retained earnings, the portion of profits that is not returned to shareholders as dividends.
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