From the course: Finance Foundations
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The balance sheet
- Alright, the first primary financial statement is the balance sheet. The balance sheet is a listing of a company's assets and its obligations, its liabilities. The balance sheet is structured around a phenomenal thing called the accounting equation, assets equal liabilities plus equity. The idea behind this equation was created by the Italians a bit over 500 years ago. The idea is simple. If I've got assets, then I need to get the money to buy those assets from somewhere. That's the inside of the balance sheet. We're not only going to list a company's assets, but we're also going to list the sources of financing to buy those assets. Where did the money come from to buy the assets? That's the idea behind the balance sheet. To get an idea of what's in the balance sheet, let's look at an actual balance sheet. Here is the balance sheet for Walmart as of January 31st, 2018. Let's just look at a couple of the key numbers here. Inventory, that's the stuff on the shelves that Walmart has to…
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