How to read and understand a company’s Balance Sheet
Balance Sheet is the true starting point for understanding a company’s financial position. It shows how much a business it owns (its assets), owes (its liabilities), and how much equity is leftover for the owners at a specific point in time.
Reading the Balance Sheet
In this article we have tried to capture few basic points which must be kept in mind whilst reading any company’s balance sheet, which will help the reader assess the company’s financial position.
Liquidity and Solvency
Liquidity is a company’s ability to meet its short-term obligations, such as its working capital needs and its debt obligations. Solvency is a measure of the company’s ability to sustain its activi...