Reading a Balance Sheet

This eBook you will give you a thorough understanding of the balance sheet, a powerful decision-making tool that every manager should be familiar with.

You will learn:

• Exactly how assets, liabilities, and equity are defined and documented
• How to use a balance sheet to determine an organization’s liquidity and solvency
• How the balance sheet and other key financial documents fit together
• How to perform vertical and horizontal common-size analyses to detect changes in an organization’s financial status
• How to assess the ability of an organization’s management by using key financial ratios

1. Assets, Liabilities, and Equity
   1. Simple Balance Sheet Example
   2. A More Complex Balance Sheet
2. Understanding Assets
   1. Current Assets
   2. Inventory/Stock
   3. Prepaid Expenses
   4. Property and Equipment
   5. Accumulated Depreciation
   6. Other Assets
3. Understanding Liabilities
   1. Current Liabilities
   2. Long-term Liabilities
4. Understanding Equity
5. What a Balance Sheet Tells You
   1. Liquidity and Solvency
   2. Tangible Versus Intangible Assets
   3. Performing a Common-Size Analysis
   4. Other Key Ratios
6. Summary
7. References