Equity aka the net value of your business

Equity aka the net value of your business

Working capital is often calculated in accounting software and spreadsheets. It’s also a good idea to calculate your working capital ratio. This is your readily available assets divided by your current liabilities.

Liabilities aka money you owe

This is money you owe, or will have to pay in the future, eg PAYE tax due the following month. Tracking liabilities in a balance sheet help you get to know the cost of running your business and the bills heading your way.