While you can learn a lot about the company by looking at a balance sheet, it doesn't tell you everything. Learn about some of the limitations of a balance sheet.
- Okay, let's discuss some of…the balance sheet's limitations.…For example, let's look at Apple's net assets,…that is, its assets less its liabilities.…They were just over 128 billion as of September 24, 2016.…Apple's market value on that day was about 607 billion.…- Okay, so why the difference?…Many individuals think that a balance sheet…should reflect the company's market value.…Well, it doesn't and it isn't supposed to.…Knowing that fact right from the start…puts you ahead of a lot of people…who do not know their way around a balance sheet.…
- External users often need to know a company's worth.…A balance sheet, however, does not generally reflect…the current value of a business.…- A favorite ratio among followers of the stock market…is the book-to-market ratio.…Computed as the total book value of equity…from the balance sheet divided by the total market value…of common equity.…Remember that equity is equal to the company's assets…less the company's liabilities.…For Apple, the book-to-market ratio…is 128 billion from the balance sheet…
Skill Level Beginner
Q: Why can't I earn a Certificate of Completion for this course?
A: We publish a new tutorial or tutorials for this course on a regular basis. We are unable to offer a Certificate of Completion because it is an ever-evolving course that is not designed to be completed. Check back often for new movies.