Join Rudolph Rosenberg for an in-depth discussion in this video Equity, part of Financial Literacy: Reading Financial Reports.
- [Voiceover] Equity is a category that covers…yet another debt of the company.…That debt is specific in nature,…since it is a debt towards the owners of the company,…also called shareholders.…I remember that the first time I got introduced…to the concept of equity being a debt…I was really surprised.…The main reason was that for me,…if the company was mine there could be no debt…between me and myself,…and in fact it's not the case.…To understand the nature of equity,…it is important to understand that when a company…is incorporated a new person is created,…in the legal sense at least.…
The new person is called a juridical person…and has a legal life of its own.…The company, being a juridical person,…has rights, obligations, and responsibilities,…and as such has a life of its own…separate from the person who raised it.…Therefore, when a company is incorporated…it is a different person from yourself,…which poses the next key question.…What's the relationship linking you to your company?…The link is the following,…
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- What is a financial statement?
- Reading the balance sheet
- Understanding depreciation, liabilities, and equity
- Reading the income statement
- Understanding revenue, costs, profitability, and net income
- How cash flow works
- Analyzing financial documents with context<br><br>
- The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.
Skill Level Appropriate for all
1. Financial Statements
2. The Balance Sheet
3. The Income Statement
4. The Cash Flow Statement
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