This is a great article. As an accountant & investor I sometimes struggle to explain some of the meanings you have laid out here to friends in a way they can understand. You have laid them out so clearly that I'll have no issue sharing this with them in the future!
Awesome piece Jimmy! Totally free of jargon or complexity that would put off non professionals. I'm going to share it with my readers.
This is a great article. As an accountant & investor I sometimes struggle to explain some of the meanings you have laid out here to friends in a way they can understand. You have laid them out so clearly that I'll have no issue sharing this with them in the future!
Thank you so much, my dear friend Victorious! I’m glad you liked it. It’s a pleasure to contribute.
Well explained. Thank you, Jimmy!
How to analyse to differentiate between productive balance sheet and unproductive balance sheet?
My stock:
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50% of Net Income is added into the Total Equity or Retained Earnings.
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50% of Net Income is used for dividend payout and business reinvestment.
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Business reinvestment is funded by net cash generated by operating activities (OCF).
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Dividend payout is funded by the FCF or Owner's Earning.
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Net Income is the mother of OCF & FCF.