00:00: It's often useful to access a financial portal to get the balance sheet of companies for a few reasons one you can often get several years of balance sheet data for year-to-year comparative purposes 2 it is easier to get and compare the data associated with other companies in the same industry and three some of the financial measures you will need in your analyzes are already calculated for you as an example of how to get balance sheet information I will use the stock analysis.com portal to get the annual balance sheet information for Apple 00:35: After accessing the stock analysis.com portal enter Apple's stock symbol AAPL in the dialog box 00:43: Click financials on the main menu and then the balance sheet subm 00:48: This sub-menu showed the balance sheet for Apple the data is from Apple's annual reports over several years stock analysis.com normally provides up to 10 years of a company's balance sheet whereas the typical annual report only provides two years worth of balance sheet data the Apple balance sheet here is for a 10-year period 01:09: Note that the top of the balance sheet shows the currency in which the balance sheet was prepared and the fiscal year of the company 01:17: The top of the balance sheet also shows the period for which the balance sheet is prepared annual or quarterly because companies that issue stock are required to file financial statements every three months a quarterly balance sheet is necessary a beginning investor would probably just need the annual balance sheet for his or her analysis 01:38: One important thing you should know about any balance sheet is the unit of measure used in creating the balance sheet in this particular case you see that the unit of measure is in millions this means that any number you see in this balance sheet should be multiplied by 1 million dollars for example if you see 200,000 in the balance sheet this translates to two hundred thousand dollars times 1 million dollars or 200 billion dollars this is better than showing nine zeros after 200 in the balance she 02:10: Let's now go over some of the important components of some balance sheets recall that balance sheets have three major components one assets or what the company owns 02:21: 2 liabilities or what the company owes 02:25: And three Equity or the difference between assets and liabilities 02:30: Let's look at Apple's total assets which is made up of current and non-current assets the first highlighted line total current assets represents assets that accompany can quickly cash into satisfy its expenses it consists of items like cash and bank accounts short-term Investments like stocks and bonds inventory and other items that can easily be liquidated the second highlighted line is total long-term assets which is often referred to as non-current assets or fix assets these assets typically include items such as one property plant and Equipment two long term investments that mature and over a one-year period and three other long-term assets the third highlighted line is total assets which is the sum of current assets and non-current assets 03:25: Let's look at Apple's total liabilities which is made up of current and non-current liabilities the first highlighted line represents total current liabilities which refers to expenses that should be paid in less than a year these include one money the company owes for products or Services it has purchased 2 repayment of money it has borrowed which are due in less than a year three salary to employees and four taxes and other expenses the next highlighted line represents long-term liabilities which is also known as non-current liabilities the typical corporate non-current liabilities includes long-term debt which is the money owed by the company do in over one year the third highlighted line is total liabilities which is the summation of current liabilities and non-current liabilities 04:21: The Third Leg of a balance sheet is equity Equity is the difference between total assets and total liabilities 04:29: In this guide, you learned how to use the Stockanalysis application to access and analyze a company's Balance Sheet. You now know how to search for a company, select the financial year, switch units to Millions, and view various financial metrics.

00:00: This video will explain Return on Equity: An important financial measure of profitability you should know. 00:07: Return on Equity also known as ROE can reveal how much money the company makes compared with how much it has invested in making that money it measures the company's profits compared to its shareholders investment it is calculated by dividing the company's net income by its average Equity outstanding in the period for which you are performing the calculation 00:30: The numbers you need to calculate Return on Equity can be found on 2 different financial statements: the company's income statement and balance sheet. From the income statement, you can retrieve Net Income. From the Balance Sheet, you can get the company’s shareholder’s equity. 00:46: Before showing how to get the data for Return on Equity, I just want to remind you about a couple of important principles in using any financial measures. 1) What matters is how the financial measures change over time 2) Another thing that matters is whether the level of the financial measure , such as Return on Equity, and its trend for any company is in line with that of another company in the same industry. 01:44: Negative Return on Equity can happen but it is not necessarily a bad thing. Reasons for Negative Return on Equity can relate to the following: 1) Sometimes, negative Return on Equity occurs due to costs associated with business improvements such as restructuring. 2) New companies, especially startups, often experience years of losses before becoming profitable. Even Positive Return on Equity also has to be looked at in context. Return on equity does not consider how much debt a company has taken on. Some companies might take on lots of debt in order to achieve high Return on Equity 02:41: I'll use data from a financial portal to show you the data source for calculating Return on Equity of any company. Specifically, StockAnalysis.com has historical data on Net Income and Shareholder’s equity for this calculation. I'll use Apple’s income statement and balance sheet for an example. Here, I’ve entered “AAPL” in the dialog box of the StockAnalysis.com website to get Apple’s financial statements. 03:08: Next, I’ve clicked on “Financials” on the main menu and then “Income” on the sub-menu, to get to the income statement for Apple. 03:17: Towards the bottom of the income statement you will see net income 03:21: To get the balance-sheet information, I’ve clicked on the "Balance-Sheet" sub-menu of the “Financials” main menu. Towards the bottom of the page you will see shareholders equity. This may not quite be the average shareholders equity for each year, but it’s close enough for our calculations. 03:39: This table shows the Return on Equity for Apple from 2014 to 2023. The Return on Equity was about 156% in 2023. But don’t get fooled into thinking that you will see this phenomenal return with many large companies. The typical Return on Equity is likely to be closer to 20%, which is generally above average for the top companies in the Standard-and-Poor's 500 stock index. 04:06: As an example, here is the Return on Equity for General Motors. You can see that its Return on Equity for 2023 was about 15%. All else being equal, an industry will likely have a lower average ROE if it is highly competitive and requires substantial assets in order to generate revenues. An automobile manufacturer certainly requires lots of equipment to make cars so it’s lower return on equity is understandable. 04:35: StockAnalysis.com publishes current Return on Equity for publicly traded companies. To access this number instead of calculating it yourself, go to the “Statistics” main menu of the website and scroll down to the section labeled “Financial Efficiency”. In that section, you will see Return on Equity and other measures that you might find useful. 04:57: This guide covered the steps to access the Return on Equity (ROE) information for a specific company using the Stockanalysis application.

00:00: This video is on understanding the cash flow statement 00:04: The cash flow statement looks at important inflows and outflows of a company to determine how much actual cash the company has on hand to take care of its expenses. It incorporates certain elements of both the balance sheet and the income statement to give a clearer view about whether the company can pay its bills than either financial statement on their own. 00:25: An example of how cash flow is determined is with something called depreciation. Depreciation is a way to recognize the expense associated with the wear and tear of equipment. For example, if a company spent $1,000,000 to buy machinery a few years ago, the depreciation concept may dictate that it wears down by $50,000 each year over a 20-year period. This is considered a yearly expense and reduces the net income of the company each year. However, when determining cash flows, this money is added back to boost cash flows because the $50,000 is not a real expense out the door. 01:22: The cash flow statement begins with Net Income and then adjustments are made to reflect the use of cash (which reduces cash flow) and the source of cash (which increases cash flow). It uses and reorders the information from a company’s balance sheet and income statement to give more clarity on the CHANGE in how much cash the company has from period to period. 01:44: The cash flow statement is made up of cash flow contributions or reductions related to 3 activities: (1) operating activities; (2) investing activities; and (3), financing activities. 01:58: Operating activities’ cash flows involve changes to balances on accounts directly related to the operations of the company (which I discuss in the balance sheet video) such as current assets, current liabilities, salaries, compensation, and so on. A non-cash expense such as depreciation, which I mentioned earlier, would be included in operating activities. 02:21: Investing activities’ cash flows involve incremental investments or expenditures such as the purchases or sales of long-term assets, like property plant and equipment, as well as purchase or sales of investment securities. For example, if a company invests in heavy equipment, that’s a cash expense that would reduce cash flow. 02:41: Financing activities cash flows involve changes to such items as the issuance of company stock, paying dividends, borrowing from banks, paying bank loans, etc. . For example, if the company pays back a bank loan, that's a cash expense that would reduce cash flow. Likewise, borrowing money from a bank would increase cash flow. 03:02: An increased cash flow is not always a good thing – it depends on the reason for the increase. For example, if a company suddenly borrows more money, this would boost its cash flow because more money is coming into its coffers. So, the cash flow statement may look good. However, this borrowing could dramatically increase it’s long-term debt, which is not necessarily a good thing since it has to eventually pay back the money with interest. On the-other hand, a decreased cash flow is not always bad depending on the reason for the decrease. 04:01: As always, trends of any financial indicator matter. You should be looking at how the cash flow of a company is changing over time. You may also want to look at the cash flows of competitors in the same industry you are evaluating. 04:16: I will use Apple to illustrate how to get cash flow from the financial portal, StockAnalysis.com. When you enter the StockAnalysis.com site, enter “AAPL” for Apple. 04:28: On this page, click the “Financials” main menu and then the “Cash Flow” sub-menu. 04:34: Scrolling down the page, you will see that the first item is Net Income, which is the starting point for the cash flow statement. Various adjustments are then made to Net Income to get to the final cash flow for each year. The 3 components of the cash flow statement are also shown on this page: the operating-related cash flow, the investing-related cash flow, and the finance-related cash flow. 04:59: You will also see the net cash flow which is the sum of the operating, investing, and financing related cash flows. 05:07: In this guide, you learned about the Cash Flow Statement. By following the provided instructions, you were able to explore different categories such as Net Income, Operating Cash Flow, Investing Cash Flow, and Financing Cash Flow. Now you can analyze the financial health of a company more effectively.