The Balance Sheet can tell you the most about the HEALTH of a company
Here is a QUICK walk thru on how to read a Balance Sheet:
Here is a QUICK walk thru on how to read a Balance Sheet:
1/ The Balance Sheet is a snapshot in time
Assets = Liabilities + Owner's Equity
Assets = Liabilities + Owner's Equity
2/ Let's take a look at the MAIN components of a Balance Sheet
Assets
- Cash
- Accts Receivable: Money you are owed
- Inventory: Product to sell
- Prepaids: Amounts you paid in advance
- Fixed Assets: Buildings, Equipment, etc.
Here is the $AAPL B/S
Assets
- Cash
- Accts Receivable: Money you are owed
- Inventory: Product to sell
- Prepaids: Amounts you paid in advance
- Fixed Assets: Buildings, Equipment, etc.
Here is the $AAPL B/S
3/ Liabilities
These are costs you owe
- Accts Payable: Money you owe to vendors
- Deferred Revenue: Sales made but not earned (Customer pays, but product not yet delivered)
- Current Portion Debt: Debt that is owed within 12mo
- Long-Term Debt: Remaining Debt owed
These are costs you owe
- Accts Payable: Money you owe to vendors
- Deferred Revenue: Sales made but not earned (Customer pays, but product not yet delivered)
- Current Portion Debt: Debt that is owed within 12mo
- Long-Term Debt: Remaining Debt owed
4/ Equity
This is the value of the company according to the books
- Common Stock (initial capital outlay)
- Contributions
- Distributions
- Retained Earnings (Cumulative view of Net Earnings)
This is the value of the company according to the books
- Common Stock (initial capital outlay)
- Contributions
- Distributions
- Retained Earnings (Cumulative view of Net Earnings)
5/ Conclusion
The B/S can tell you a lot about the health of a business
The health of a business is important, especially in slow economic times
As an investor, you want to know:
- How much debt there is
- Can Debt be paid off
- How leveraged a co is
- How efficient a co is
The B/S can tell you a lot about the health of a business
The health of a business is important, especially in slow economic times
As an investor, you want to know:
- How much debt there is
- Can Debt be paid off
- How leveraged a co is
- How efficient a co is
If you enjoyed this thread, please:
1. Follow me (@Dividend_Dollar) for more
2. Retweet the 1st tweet below to share this thread
1. Follow me (@Dividend_Dollar) for more
2. Retweet the 1st tweet below to share this thread
Loading suggestions...