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Microsoft Excel 1E: Computing Percentage Changes, Balance Sheet Example

Overview

house

Personal Equity :

  • The following example is a calculation of the equity of an individual.
  • A person owns a house ($200,000) and a car ( $15,000) and furniture and other household items ($10,000) as well as a bank account of $2,000
    • The total assets of this individual =$227,000
  • This same individual still has a mortgage of $165,000, a car loan of $15,000 and a credit card account of $1,000.
    • The total liabilities of this individual =$181,000
  • Personal equity = $227,000 - $181,000 = $46,000

Balance Sheet:

  • Like the Income Statement, the Balance Sheet is a commonly used business report.
  • The Balance Sheet shows what a business owes and what it owns.
  • Assets are items that a business owns like cash in the bank, an automobile, a building, supplies and inventory.
  • Liabilities are like debts. While a business may own a building (asset), if it had to borrow money from the bank to purchase the building, the mortgage is a liability .
  • Other liabilities include money owed to suppliers for things bought for a business (Accounts Payable), as well as other debts.

Equity is what a business is worth, calculated by adding up all assets and subtracting all liabilities.

Formulas and Formatting:

The spreadsheet below shows a partial balance sheet for Joe's Computer Store.

figure 1E1

 

formulaasset

  • Note that a $ is only used on the first number in a column. As in the Income Statement subtotals may appear in a column to the right. In the example above the formula =sum(C8:C12) would appear in the yellow box.
  • The calculated number would be $40,750
  • You will be completing the rest of the formulas for this spreadsheet in the guided review section later.

Percentage Markups :

percentage

  • If an item is sold for $150 and it cost only $100, the percentage markup is 50% (which in these nice easy round numbers equals $50)
  • To calculate a percentage markup the formula is calculated as follows:
    • markup=(150-100)/100
    • markup=.5 or 50%

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