How can I make my balance sheet transparent and understandable for third parties?
June 23, 2022 | 50,00 EUR | answered by Laura Hohenwarter
Dear tax consultant,
my name is Hans Krausmüller and I am the managing director of a medium-sized company. Over the past few years, the company has been consistently growing and we are now faced with the challenge of presenting our balance sheet in a transparent and understandable way for third parties.
So far, we have prepared our balance sheet internally and it was especially understandable for me as the managing director. However, we are now in a situation where potential investors, banks, or business partners would like to have insight into our balance sheet. I am concerned that these individuals might have difficulty understanding our balance sheet and could draw incorrect conclusions.
I would like to know from you how we can structure our balance sheet in a way that is transparent and understandable for third parties. Are there specific key figures or graphics that we can use? Should we restructure our balance sheet or add additional information? How can we ensure that our balance sheet is understandable for both financial experts and laypeople?
I appreciate your support and look forward to your suggestions and tips on how we can optimally present our balance sheet.
Sincerely,
Hans Krausmüller
Dear Mr. Krausmüller,
Thank you for your inquiry regarding the transparent and understandable presentation of your balance sheet for third parties. It is understandable that you are concerned that potential investors, banks, or business partners may have difficulty understanding your balance sheet and drawing incorrect conclusions. However, a transparent and understandable balance sheet is crucial for the trust and credibility of your company.
To make your balance sheet transparent and understandable for third parties, there are various measures you can take. First and foremost, it is important that you structure your balance sheet clearly and concisely. For example, you can use a classification that clearly distinguishes and presents the various items and positions in the balance sheet.
Furthermore, you can include certain key figures and graphics in your balance sheet to make important information easily digestible at a glance. For example, you can use key figures such as the equity ratio, liquidity ratio, or profitability to vividly illustrate the financial situation of your company. Graphics such as charts or diagrams can also be helpful in making complex relationships understandable.
It may also be helpful to add additional information in the form of explanations or notes to explain certain facts or developments in your company. This can help third parties better understand the balance sheet and get a comprehensive picture of your company.
To ensure that your balance sheet is understandable for both financial experts and laypeople, I recommend using clear and understandable language. Avoid technical terms and complex formulations, but rather explain the contents of your balance sheet in simple and understandable terms.
In summary, a transparent and understandable balance sheet is crucial for the trust and credibility of your company. Through a clear structure, the use of key figures and graphics, and additional explanations, you can ensure that your balance sheet is transparent and understandable for third parties.
I hope these tips help you in the optimal presentation of your balance sheet. If you have any further questions or need assistance, please do not hesitate to contact me.
Best regards,
Laura Hohenwarter
