How To Analyze a Balance Sheet

How To Analyze a Balance Sheet

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Hey, I'm Daniel Pronk and in this video, I explain how to properly read a balance sheet to see if a company's financially strong. Balance sheets are crucial to understanding a business and seeing if it is a good investment. In this video we learn how to read Balance Sheets and red flags to look for.

My FULL Investment Course Is Available Now On My Website:

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Rule 1 Investing

This is not investment advice. Please do all your own research before buying and selling any stocks or securities. I am not responsible for any loss or gain you may have.

[joshwyrosdic]

Instead of taking all those accounting classes I should've just watched this lol

[dukesinvesting]

There aren't enough quality videos explaining stuff like this for beginning investors, great video!

[sungyentsai]

8 minutes in, I hear a humble men who has knowledge to share with the rest of the world. Not some entitled a**hole. Great Video, and thank you for sharing! Really appreciate it.

[Alpha-penz]

The best breakdown of a balance sheet I’ve seen on here... Looking forward to see what you come up with next!

[MrIAmKam]

No gimmicks, no bullshit. Just teaching. Thank you. This is great work!

[kamransaeed]

Dude I just learnt more from this one single video than I ever did from entire time in the University. I hope you become a millionaire one day.

[raimundasv]

Just a correction. A Current ratio of >3 means that the company might have too much cash and they are missing out on potential investment opportunities, you should aim between 1-2.5

[Lloydstocks]

This is the best tutorial of a balance sheet I've watched, please show us how you go through all the financials! Liverpool UK Here 👍

[zacharybrooks]

BOOM! Just what I was hoping you’d produce. Please consider making a video on income statement and cash flow

[andrewdelgado]

This was an amazing introduction to the balance sheet. I wish this video was available when I was taking accounting in college. :) nice work!

[nicoleondiano]

This was a fantastic explanation! I feel like I’ve been investing with a blindfold on and you’re helping me make sense of everything, thanks!!

[taylorlewis]

I’m a beginner investor not going into any accounting or finance degree. I’m majoring in biology and doing stocks on the side. This has been the best tutorial I’ve seen for balance sheets. Keep up the good work. Post more on income statement and cash flow.

[XxFailZorsxX]

Yes!!! Mr. Pronk, this is the content we have been waiting for! Thank you.

[TheMotionBboy]

I cannot believe how AWESOME and informative this video was! I’m blown away. I never comment on videos, but this one just moved me to do so. Thank you. Dude. You rock.

[McRuffster]

This video is invaluable for beginners. Thank you and keep up the good work!

[caitpatel]

Okay so I'm getting my MBA and I was beginning to think I was stupid but you literally explained this better than anyone I've ever seen and it totally makes sense now THANK YOU please keep doing videos. I love that you gave real world examples that helped my brain make sense of it.

[Nehalpanchamia]

This is by far the best video I have seen on understanding the balance sheet. Thank-you for making this video. I will look out for your other videos, esp. to understand Income statements and cash flow. More power to you Daniel!

[winsonliu]

Suggestion for when you’re comparing different time periods of each line item (around minute 13-14). This is where having this data exported into Excel is better than using a website. Instead of looking at the numerical value increases, it’s more valuable to know the relative change. So you need to calculate the year-over-year change for each year to see if that has increased or decreased.

If you compare that percent change of Current Liabilities and Current Assets, you’ll see which one is growing faster than the other. If you want to keep that ratio at a certain level at all times, especially if Google in this example is growing CA faster than CL, then they should take that excess growth and throw it into investments (unless their plan is to build up a big cash position to make an acquisition).

[tommyphillips]

Watched all three of your tutorials on analysing financial statements. Managed to make a lot of notes on what to look for. Really appreciate this, as someone who is new to investing. Great video/s.

[ocw]

As someone who is just getting started in the stock market, you're one of the best resources I've seen anywhere. Love the way you break down your videos very concisely. Subscribed!