From the course: Finance for Non-Financial Managers (2015)
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What to look for in a balance sheet
From the course: Finance for Non-Financial Managers (2015)
What to look for in a balance sheet
- [Instructor] We will start with the mother of all financial statements, the balance sheet. The balance sheet embodies the accounting equation, one of the greatest inventions of the human mind, invented in Italy over 500 years ago. A listing of things we own, assets, is easy, anybody can list assets, but the insight from the accounting equation is to then also list where do we get the money to buy those assets, the liabilities and the equities? Now assets, they're valuable resources. They are the items that will provide us benefit in the future. Cash, for example, is the asset that we can all quickly identify. If you look at the balance sheet of Apple for example, you see that Apple had on September 29, 2018, $25.9 million in cash. Now that's a lot of money, but it's not even close to being Apple's biggest asset. Another asset is accounts receivable, money that is owed by other people to a company, that's another…
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