The introduction to Balance Sheet´s chapter

Balance Sheet is no less an essential part of a company’s analysis. As we have already said, Income Statement tells us how profitable the company is, the margin, the costs, the growth trends, etc. The Balance Sheet, on the other hand, shows us the detailed financial health of the company. The investor cannot underestimate this part because even a company with a sharp increase in profits can be dangerous if its balance sheet is toxic. In addition, a company’s profitability may temporarily decline during tail events, even if it is excellent. However, the balance sheet will show you whether the company is financially great to survive the financial crisis. The balance sheet consists of assets on the one side, liabilities, and equity on the other.


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