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How UK banks made big profits from inflation: and what this tells us about competition

Balancing assets, liabilities and shareholders’ equity

Have you ever wondered how big companies manage their billions? There is a simple secret for their financial health and it is called ‘the statement of financial position’ or ‘the balance sheet’. Kulnicha Meechaiyo takes a closer look at this fundamental accounting equation

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business finance, balance sheets, assets and liabilities, shareholders’ equity, business failure.

The statement of financial position provides a snapshot of the financial condition of a firm at a specified time. The statement of financial position is a list of the firm’s assets and liabilities, and the difference between the two is the net worth of the firm. This is called shareholders’ equity.

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Previous

Regulation, pollution permits and correcting information failure

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How UK banks made big profits from inflation: and what this tells us about competition

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