How do I read annual accounts?
You have the Dutch annual accounts of your own BV, of a customer or of a company you want to take over. Where do you start and what do you look for? Five steps, from the totals to the details.
The short answer
Read annual accounts in five steps: (1) which size class and which period, (2) the balance sheet: what the company owns and how it was paid for, (3) the profit and loss account: what was left over, (4) the notes, (5) three ratios: solvency (equity divided by balance sheet total), current ratio and working capital. Always compare with the previous year. This page is about Dutch annual accounts under the Dutch Civil Code (DCC).
Updated 30 October 2026
Key facts
| Components | Balance sheet, profit and loss account and notes (art. 2:361(1) DCC) |
| Comparative figures | Next to each item is, as far as possible, the amount of the previous financial year (art. 2:363(5) DCC) |
| What becomes public | Micro: the balance sheet with disclosures. Small: the balance sheet with notes, without profit and loss account (art. 2:396(8) DCC). Medium-sized and large: everything, for medium-sized in simplified form |
| Ratios | Solvency, current ratio and working capital: see the ratio calculator |
Step 1: know what you are holding
First look at the heading: which legal entity, which financial year, and which form of the annual accounts. Filed annual accounts of a small BV (Dutch private limited company) contain no profit and loss account, because a small legal entity does not have to make that public (art. 2:396(8) DCC). A micro legal entity files only a limited balance sheet. If you miss the profit, nothing is hidden: that is allowed. The limits of the classes are at when do I become a small legal entity.
Then look at the accounting policies and the date of the annual accounts. Have they been adopted or not yet? Is it a non-calendar financial year? That determines whether you are comparing figures over a full year.
Step 2: the balance sheet, left and right
The balance sheet is a snapshot at the balance sheet date. One side shows where the money is: fixed assets (in use for longer than a year), inventory, receivables and cash and cash equivalents. The other side shows where it comes from: equity, provisions and liabilities, non-current or current. Both sides are equal by definition. The law requires that the balance sheet give a 'true, clear and consistent' view of the size and composition of the capital (art. 2:362(2) DCC).
- Equity: what the shareholders have put in and what the company has retained. If it is negative, read the notes on continuity.
- Current liabilities: what has to be paid within a year. Put them next to cash and cash equivalents and receivables.
- Receivables: if accounts receivable are higher than one to two months of turnover, that is a question for management.
Step 3: the profit and loss account, from top to bottom
The profit and loss account shows how the result of the financial year arose (art. 2:362(3) DCC). Read it like a staircase: net turnover, minus the cost of what was sold, gives the gross margin. From that go staff costs, depreciation and other operating costs, which gives the operating result. Then come financial income and expenses, tax and the net result. Do not only look at the last line, but at the margin at every step.
Also look at what is not there. The law prohibits netting items that must be shown separately (art. 2:363(2) DCC).
Step 4: the notes
The notes tell how the figures came about. Look for four things: the accounting policies (for example the depreciation period), the breakdown of the largest balance sheet items, the non-current liabilities and security, and events after the balance sheet date. For micro legal entities the notes are reduced to a few disclosures under the balance sheet (art. 2:395a DCC); for small ones exemptions are possible (art. 2:396 DCC). Short notes are therefore not a sign of sloppiness.
Step 5: three ratios
- Solvency = equity divided by balance sheet total. It says how much of the company was paid for with own money.
- Current ratio = current assets divided by current liabilities. Above 1 the company can pay its short-term debts from its current assets.
- Working capital = current assets minus current liabilities, in euros.
There is no statutory lower limit for these figures; they differ per sector. The figures per sector show how BVs that file are doing on average.
Case: Meubelmakerij Houtkamp BV
A small BV: 12 employees, net turnover € 960.000, balance sheet total € 400.000. Only the balance sheet total stays below the micro limit, so the BV is small.
| Balance sheet 31 December 2025 | Amount | Amount | |
|---|---|---|---|
| Fixed assets | € 120.000 | Equity | € 180.000 |
| Inventory | € 60.000 | Long-term loan | € 80.000 |
| Accounts receivable | € 90.000 | Accounts payable | € 70.000 |
| Cash and cash equivalents | € 130.000 | Taxes and social security contributions | € 40.000 |
| Other current liabilities | € 30.000 | ||
| Total | € 400.000 | Total | € 400.000 |
| Profit and loss account 2025 | Amount |
|---|---|
| Net turnover | € 960.000 |
| Cost of sales | € 576.000 |
| Gross margin (40,0%) | € 384.000 |
| Staff costs | € 190.000 |
| Depreciation | € 24.000 |
| Other operating costs | € 100.000 |
| Operating result (7,3% of turnover) | € 70.000 |
| Interest expense | € 5.000 |
| Tax | € 16.000 |
| Net result | € 49.000 |
Current assets are 60.000 + 90.000 + 130.000 = € 280.000; current liabilities 70.000 + 40.000 + 30.000 = € 140.000. The ratios:
- Solvency: 180.000 / 400.000 = 45,0%. Last year equity was € 144.000 on a balance sheet total of € 360.000: 40,0%. Equity grew with the profit of € 49.000, minus € 13.000 dividend (144.000 + 49.000 - 13.000 = 180.000).
- Current ratio: 280.000 / 140.000 = 2,0.
- Working capital: 280.000 - 140.000 = € 140.000.
The picture: soundly financed and well able to pay short-term debts. Questions a reader would still ask: what does the inventory of € 60.000 consist of and how is it valued, and what are the repayment terms of the loan of € 80.000? You look that up in the notes.
Sources
Frequently asked questions
How do I read annual accounts as a beginner?
Start with the totals. On the balance sheet look at equity, liabilities and cash and cash equivalents, on the profit and loss account at turnover and net result. Compare each figure with the previous year, which the law places next to the current one as far as possible (art. 2:363(5) DCC). Then read the notes on the accounting policies.
What does solvency say in annual accounts?
Solvency is equity divided by balance sheet total. With € 180.000 of equity on a balance sheet total of € 400.000 it is 45,0%. It says how much of the capital is financed with own means. There is no statutory standard; sector and age of the company determine what is usual.
Why is there no profit and loss account with my filed annual accounts?
Because a micro or small legal entity does not have to make it public. A small legal entity makes the balance sheet with notes public (art. 2:396(8) DCC). The profit and loss account does exist and is in the prepared annual accounts.
What is the difference between the balance sheet and the profit and loss account?
The balance sheet is a snapshot of assets and financing at the balance sheet date. The profit and loss account describes the course over the whole financial year: the income and expenses that together form the result.
Where do I find the annual accounts of another company?
Filed annual accounts are in the Business Register of the KVK (the Dutch Chamber of Commerce). What you see there depends on the size class of the company: for small and micro legal entities it is a more limited picture.
Read more
Preparing Dutch annual accounts?
Your first set of annual accounts is free, for every size class. Create an account and prepare the annual accounts of your Dutch company under Title 9 of Book 2 of the Dutch Civil Code.
Get started