Balance Sheet — Assets
Everything the company owns, line by line.
Assets are split into non-current (held long term) and current (expected to convert to cash within a year). Read each line asking two questions: is it real, and is it worth what's stated? Non-current assets Property, plant & equipment Land, buildings, machinery, at cost minus accumulated depreciation. The productive base. Intangible assets Goodwill, software, licences. Goodwill from acquisitions can be impaired, watch for write-downs. Long-term investments Stakes in other companies or securities. Check how they're valued (cost vs fair value). Deferred tax assets Future tax benefits. Large ones rely on making future profits to use them. Current assets Cash & equivalents The most real asset. Healthy cash gives options and safety. Trade receivables Money owed by customers. Rising receivables faster than sales can signal trouble collecting. Inventory Unsold goods. Rising inventory faster than sales can mean weak demand or obsolescence. Short-term investments Liquid securities held for under a year. Sales grew 10% but receivables grew 40%. That gap is a flag: the company may be booking sales it's struggling to collect, or offering loose credit to push revenue. For a bank, the biggest 'asset' is its loan book. There, asset quality (NPLs) matters far more than physical assets. Read the loan classification and provisioning notes closely.
Part of Learn NEPSE Investing, a free course on reading Nepali company accounts and charts. Section: The Annual Report.