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5.00 Financial Recordkeeping

5.00 Financial Recordkeeping. Horticulture II. Net Worth Statement. Total assets (A)= current assets + non-current assets

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5.00 Financial Recordkeeping

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  1. 5.00 Financial Recordkeeping Horticulture II

  2. Net Worth Statement • Total assets (A)= current assets + non-current assets • 1. Current assets (ac) – items that can quickly be converted to cash or that will be sold within 12 months – cash on hand, checking and savings accounts, stocks, bonds and cash in value of life insurance, money others owe you, current non-depreciable inventory

  3. Non-Current Assets • 2. Non-current assets (an) – items that have a useful life of more than one year and are used in the business • non-current, • non-depreciable inventory, • land A = + a a c n

  4. Liabilities • Total liabilities(L) = current liabilities (debts) + non-current liabilities (debts) • 1. Current liabilities (c) – accounts and notes payable, this year’s part of non-current liabilities • 2. Non-current liabilities (n) – mortgages and other debts not due this year L = + c n

  5. Net Worth • Net Worth and Equity are the same thing • Net Worth(E) = Total Assets(A) – Total Liabilities (L) E A L = -

  6. L R = E Debt to Equity • The Debt-to-Equity Ratio (R) • = Total Liabilities(L)/ Net Worth(E)

  7. Activity • Use the information from the notes to complete the SAE financial records worksheets.

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