Compare with asset. Balance sheet asset is got from adding total liabilities (current and non-current liabilities) to shareholder’s equity ( retained earnings and share capital). This formula for balance sheet asset is based on the key equation in finance Assets = Liabilities + shareholder’s equity. When calcualting assets using a balance sheet we not only want to kown what we own or owe, but also want to find out our worth as company or individual. This calcualtion helps are know our financial standing,are we healthy or are we facing insolvency and bankruptcy.
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