Movement balance

Movement balance is a means of balance sheet analysis that is used to gain a better insight into a company .

definition

The movement balance differs from other balance sheets in that it is formed from two consecutive annual balance sheets . That is why you can use it to look at the company for a certain period of time, whereas a normal final balance sheet only reflects the status of the annual financial statements . Both investments (column use of funds) and the funds used (column source of funds ) can be taken from the movement balance . This balance sheet is therefore particularly helpful for demonstrating changes in the flow of money.

method

First, a difference balance is created from the balance sheets for the current and previous year (or from different years). Each current value of an item is subtracted from the value of the previous year. The differential balance therefore consists of both positive and negative monetary units, but has the form of a normal balance.

In contrast, the movement of the balance held assets and liabilities includes the two sides of funds and sources of funds . Now the amount of each item of the difference balance is shifted according to the following scheme:

Use of funds (use of capital)	Origin of funds (origin of capital)
Asset growth Increase in fixed assets Increase in general working capital Increase in current assets to increase solvency Acquisition of securities Bank balance cashbox Capital reduction Decrease in equity Reduction of borrowed capital Extraction of raw materials Decrease in the distributable profit	Self-financing by increasing the subscribed capital and the capital reserve Debt financing Increase in borrowed capital Self-financing Increase in retained earnings Increase in profit carried forward Refinancing Reduction of fixed assets Reduction of the general current assets Reduction in solvency (bank, cash register) Financing from amortization returns

If the sums of the two sides are identical, the creation of the movement balance is usually successful.

The following applies: investment + capital repayment = financing + liquidation .

Depreciation as a special feature

However, only depreciation on tangible assets is taken into account for the 5th item (no depreciation on financial assets and the like). These can be found in item 12 of the income statement ( Section 275 (2) HGB). The depreciation amount is usually added to the increase in fixed assets, since it is assumed that a replacement investment will take place in full.

literature

• Claus Ribell: Cash flow and balance of movements. Instruments for analyzing the annual financial statements . 4., rework. Edition. Deutscher Sparkassenverlag, Stuttgart 2003, ISBN 3-09-306074-5 .

Individual evidence

1. ^ Franz Fricke, Klaus-Hartwig Rube: Business Administration . Bayerischer Schulbuchverlag, Munich 1996, p. 56.