Reading balance sheets for lawyers

This webinar provides a practical introduction to reading and interpreting company balance sheets, explaining the significance of key balance sheet items in corporate transactions and commercial advice. It will explore common financial warning signs and areas that may require further investigation, helping lawyers build confidence when reviewing financial information as part of due diligence and wider advisory work.

Topics covered include:

• Purpose and function of a balance sheet
• Relationship between the balance sheet, profit and loss account and cash flow statement
• Fundamental accounting equation
  • Assets
  • Liabilities
  • Shareholders’ funds
• Understanding current and non-current assets
• Understanding current and non-current liabilities
• Fixed assets
  • Tangible assets
  • Intangible assets
• Debtors and creditors
• Cash and working capital
• Loans and other borrowings
• Share capital and reserves
• Directors’ loan accounts
• Net assets and net liabilities
• Signs of financial strength
• Financial warning signs and red flags
  • Insolvency indicators
  • Negative net assets
  • Excessive debtor balances
• Reading balance sheets in transactions
  • Share sales
  • Asset sales
  • Investments
• Practical examples and common mistakes