The balance sheet is the document where assets, liabilities, and equity of a particular company or a person are recorded. It’s a crucial financial statement wildly used in accounting, investing, analytics, and other areas. In this article we’ll explain what a balance sheet is, cover its essential components, and answer the most common questions.
The climate change topic seems to be heated these days, eco-friendly goods and services grow in demand and more people interested in renewable energy. So, let’s look at the opportunities this new green world has to offer to investors. We gathered green public companies in various industries (energy, automotive industry, food and farming) that you can consider to add to your portfolio to jump on the green trend and make some money off it.
Assets, liabilities, and equity are three core accounting concepts. It’s impossible to evaluate a company properly without a thorough knowledge of them. The word “equity” has many meanings but, in this article, we focus on equity in the general accounting sense, although we briefly cover other kinds of equity too.
Assets, liabilities and equity are three basic building blocks that form the balance sheet equation and any investor should have a deep understanding of what they mean. In this article, we’ll explain what liabilities are and we’ll also provide a real example using a balance sheet of a public company.
Rogue Trader is a story of a guy who caused a collapse of the world’s second-oldest bank in 1995. 20 years have passed since the film’s release so we’re a bit late for a review but we feel that it’s an important movie to remember because it’s underappreciated and misunderstood.
The main purpose of any investment is to generate more money than the amount invested, the time it takes to do so is called the payback period (PBP) in capital budgeting. Payback period is wildly used by investors and entrepreneurs when they consider to open a new enterprise, invest in an existing business, or when they try to pick the best opportunity among two or more possible options.
For many years, the majority of economists based their financial theories on a few basic assumptions: all market participants are perfectly rational (investors aren’t emotional at all), and they are also free from any biases or information processing errors. The real-life and practical economy showed that these assumptions don’t work in many cases and people tend to behave irrationally from time to time.
There are two main types of stocks on the public market: common and preferred. Why do we need to have two distinct types of shares and what’s the difference between them? In this article, we’ll take a look at these two types of stocks (shares) to figure out which one would be a better choice for an investor.
More than 20 years ago, in 1997, Robert Kiyosaki and Sharon Lechter released their book “Rich Dad Poor Dad” which became an immediate success. This book is about personal finance, entrepreneurship, business, investing and economics and it has become some kind of a bible for a lot of people.
It’s usually justified to be skeptical about financial forecasting, yet most portfolio managers have certain expectations regarding the future rate of return on the investments they make. How does one figure out an expected return of a financial portfolio? In this article, we’ll explain a method that is commonly used to calculate the expected return.
Most of the people can read nowadays (the literacy level is close to 99%), yet reading an annual report of a company is a different story. It can be very confusing for an investor to figure out what are the key things to look after and what information is worth reading.
Today we are starting a new category on our website - stock forecasts. We’ll share an opinion on stocks' future prices, analyze them from technical and fundamental points of view, and give our recommendation on whether we would consider buying, holding or selling a particular market security.
You can open almost any old book on wealth management, investing or smart capital allocation and you would find the same idea that seems to be extremely popular at all times: investing in real estate is a great option. Most of those books were written a while ago, has the situation regarding investing in real estate changed in these days?
Before a company makes its way to the public market, it has to go through a complex and expensive procedure of Initial Public Offering (IPO). In this article, we’ll look at how an IPO usually goes, why is it important, and why many mid-size companies are trying hard to achieve this significant milestone.
When it comes to fundamental analysis of a company, there is one crucial metric that just can’t be ignored and it’s called EBITDA. It’s wildly used by investors, portfolio managers, and market analysts. Today we’ll try to explain what does this metric mean and we’ll also provide a few examples.
Liquidity is a core concept in finance, capital management, and business and that’s why this term is often used in media by portfolio managers, market analysts, and various economists. Although this term is very popular, it’s not that easy for an outsider to understand what it means.
On Wednesday, July 31, 2019, the Federal Reserve lowered interest rates by 25 basic points to a range from 2.00% to 2.25%. It was the first interest rate cut since 2008. Why did this happen and what are the possible consequences of such a change?
The Quick Ratio is one of the most basic liquidity ratios used in the company’s analysis. Some accountants call it the acid-test ratio or the working capital ratio. The Quick Ratio is easy to calculate and it has some advantages over similar ratios like the current ratio.
Return on Assets (ROA) is one of the key fundamental indicators used by financial analysts. ROA can give you a lot of hints on what’s going on with a particular company and how effective it’s managed. In this article, we’ll explain what ROA is with some simple examples, and show how this financial ratio can be used in the analysis of a business' profitability.
In fundamental analysis, the current ratio plays an important role by expressing the liquidity of the firm in just one number. This is a basic financial indicator in accounting which is easy to calculate. Today we’ll have a look at this ratio and explain how it can be useful for an investor.
There are plenty of useful market indicators which attract the attention of many investors and one of the most popular indicators is price to earnings (P/E) ratio. It shows the relation between the current market price of a security and its earnings per share (EPS).
A dividend is a payment given to the company’s shareholders on a regular basis. Generally speaking, this term means: ‘an additional outcome’ and it can also be used outside of finance and investing. If a farmer buys a cow, the milk it produces can be called a dividend and a growth in the cow’s weight can be called a capital gain, which at some point can be “cashed out”.