What Does Negative Shareholders Equity Mean On Balance Sheet

Recently I was reviewing a list of stocks from the BSE-500 index. I found some stocks showing negative shareholders’ equity. I wondered, what caused the negativity? The companies I’m talking about are these: None of the above companies are financially healthy. To cross verify, I checked their overall scores in my stock analysis worksheet. These […]

Fundamental Analysis: How To Read a Balance Sheet Report?

How to read and analyze balance sheets of companies for investments

This is in a series of articles that will highlight the process of fundamental analysis. In this section, we will learn how to read a balance sheet report and also understand the business it represents. Out of the three financial reports, perhaps the balance sheet is one of the most important reports of all. Why? Because it gives […]

Financial Statements: Understanding Cash Flow Statement of a Company

Out of balance sheet, profit & loss a/c and cash flow report, perhaps cash flow statement is the easiest report to read and comprehend. But in terms of effectiveness to judge fundamental strength of a company, this report is as valuable as the other two. Cash is king for a company. If cash is flowing […]

What to Look Inside Financial Statements of Companies?

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To do fundamental analysis of companies, it is important to look inside financial statements. There are three types of financial statements: The balance sheet, profit & loss accounts, and cash flow statement. These three documents has loads of numbers inside them. What a beginner should look for inside these reports? We will know about it […]

What it means by Shares Issued at a Premium Price?

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We will see examples that will explain what it means to share issued at a premium price? What does it mean by premium price? All shares of a company have a face value (or par value). Typical par values of an Indian share can be Rs.1, Rs.2 & Rs.10. Nevertheless, a company can have any […]

The Rule of Debit and Credit Transactions: Examples

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Understanding of Debit and Credit transactions is essential for accountants. But these days, “this rule” is taught even to Business Schools. Debit and Credit transactions are used for accounts management of company. It is also known as “double entry system“. Why double-entry system is called so? As the name suggests, every transaction is recorded in journal at […]

How to Record Balance Sheet Transactions: Examples

Every balance sheet transactions recorded by the company, alters its Balance sheet. For investors, it is interesting to understand balance sheet transactions of companies. Though the understanding of balance sheet transactions is not essential, but its knowledge helps. It will greatly help value investors to read and interpret companies financial reports. When I started learning about balance sheet […]

PERSONAL BALANCE SHEET FOR INDIVIDUAL (SUITABLE FOR SALARIED EMPLOYEE)

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What is the utility of a balance sheet for individual? Why a salaried employee must maintain a personal balance sheet? There can be no if’s and but’s in the answer. An individual must maintain a balance sheet for personal use. Why? Because it will assist in keeping ones personal finance in order. What is a […]