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What is a Balance Sheet?
A financial statement that report's a company's assets, liabilities and shareholder's equity at a specific point in time. It can only be for a single date, whereby the total assets and total liabilities are always equal on the balance sheet.
Total stockholders' equity (Net worth): Total Assets - Total Liabilities
Current Assets: Cash and other assets that are expected to be converted to cash within a year.
Non-Current Assets: Long-term assets where the full value won't be recognised until at least a year
Net Receivables: Money owed to the business. (Receivables - Bad Debt)
Goodwill: Eg if a company buys over another company for 12bil but the company book value is 10bil, 2bil is considered goodwill.
Intangible Assets: Not a physical Asset, Goodwill, Brand name etc
Liabilities: What the Company Owes. They are not only the debts of the company, but also reserves of various kinds and the equity/ownership interest of stockholders
Current Liabilities: What the company expects to be paid off in the next 12 months
Accounts payable: Amount owed to creditors or suppliers
Accrued Liabilities: Expenses that the business has that has not been paid
Deferred revenues: Amount that the business has received, for services or products that have not yet been delivered
Non-Current Liabilities, what the company owes not within the next 12 months
Deferred Tax liability: Tax that is assessed or is due for the current period but has not yet been paid
Deferred Revenues: Services not expected to be performed this year
Total Liabilities: Current + Non-Current Liabilities
Retained Earnings: Amount of net income the business generated after paying out all of its dividends.
OCI: Unrealised gains/losses that the firm experienced
Calculations one can do on data from a balance sheet
Total Current Assets/Total Current Liabilities (LF > 1, ratio above 2 is very good)
LF Total Cash and Total Current Assets have been increasing over the years.
LF Total Stockholders' equity is increasing (ie the total assets is increasing faster than the total liabilities)