All the benefits derived by marshalling of assets and liabilities are derived by following the statutory format.
The presentation of the information relating to the previous period and the current period side by side would also enable the organisation to have a comparative overview of each of the items within the Balance Sheet.
information not obtainable
Marshalling of assets and liabilities or arranging the balance sheet items in the statutory formats would give a better understanding of the balance sheet as well as provide for derivation of additional information.
However, there is a lot of other information that is needed by the organisation that is not obtained ready hand from the Balance Sheets even after they are arranged in the aforesaid manner.
Information relating to values of Working Capital, Net Fixed Assets, total Capital employed, long term loans employed in the business, share holders Net Worth, equity share holders Net Worth, Non-Assets (Asset side items not to be considered as fixed assets) etc., are examples of such information.
These values have to be worked out using the information available within the balance sheet.
Solution
To enable derivation of such additional information, the information in the balance sheet is redrawn into a statement which is termed "Balance Sheet in a Form Suitable for Financial Analysis".
