One of the first ideas that occurs to us to mitigate this limitation is the comparison of balance sheets from consecutive years, grouped by homogeneous assets.
This, of course, constitutes an enrichment of the information but it still does not allow us to delve into the details of what and how things have happened within those exercises.
To simplify the comparison and broaden the understanding, an accounting mode has been developed that, based on two balance sheets, allows delving into the subject. This type of statement has been called a financing table, a study of sources and uses, sources and employment, and, more generally, a state of origin and application of funds, which is the term we will use from now on.
To meet these financing needs, the company has a series of resources that, first of all, we can classify as its own and those of others.
Among their own, we can talk about the benefits obtained from the company's own economic activity and that have not been distributed as dividends or distribution of profits among the partners.
These amounts of retained earnings are called reserves. We could also talk about self-financing or consolidation of positive results. Another source of own resources is constituted by capital increases, that is to say, the new contributions of the shareholders or partners of the company.
Among the external resources we can segregate two large types: first, those that come from long-term debt, (either by issuing bonds or by financing investments with long-term credit loans); on the other hand, any type of increase in short-term or current liabilities.