From the course: Corporate Financial Statement Analysis
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Balance sheet
- Since we're going to be using the financial statements to do our analysis, let's quickly review the primary financial statements. There are three. The balance sheet, the income statement and the statement of cash flows. Let's briefly review what's contained in each one of these three primary financial statements and we'll start with the mother of all financial statements, the balance sheet. The balance sheet is a listing of a company's assets, it's resources, it's valuable things, it's cash, it's land, it's inventory, the thing that it sells. Those are it's assets. The other part of the balance sheet is a listing of where the company got the money to buy those assets, the liabilities, and the equities. The balance sheet embodies the accounting equation, one of the greatest inventions of the human mind invented in Italy over 500 years ago. Now we're going to use a hypothetical example to do some financial ratio analysis. So let's make up this example now. We'll call the company, very…
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