🔍
What is Balance Sheet? Balance Sheet Kya Hota Hai? Simple Explanation in Hindi #TrueInvesting - YouTube
Channel: True Investing
[0]
Before investing in any company,
[3]
we must analyze that company.
[6]
And to do an analysis of any company,
[10]
it is very important for us to understand
[12]
the financial statements of that company.
[14]
There are mainly 3 types of financial statements.
[18]
Which are called Balance Sheet,
[20]
Income Statement,
[21]
and Cash Flow Statement.
[23]
And now in this video,
[25]
we will learn about the balance sheet.
[28]
We will know what is a balance sheet?
[31]
Why is it called a balance sheet?
[33]
And what information it has about the company?
[37]
Also, at the end of the video,
[39]
we will give you a small task
[41]
on the basis of this video.
[43]
So that you can understand the content of this video more thoroughly.
[47]
Therefore, you must watch this entire video carefully.
[50]
Hello friends, welcome to our YouTube channel True Investing.
[54]
trueinvesting.in is our website
[56]
which is based on investment education.
[57]
If you are interested in Investing, want to learn it,
[61]
then do visit our website.
[63]
Let us know
[65]
what is a balance sheet?
[67]
Friends, a balance sheet is a financial statement
[70]
that every company makes when the financial year ends.
[75]
And companies show it mainly in their annual reports.
[80]
A balance sheet gives us information about
[83]
three things of a company.
[86]
The first one is Assets
[87]
That is, what are the things of economic value
[90]
the company has.
[92]
The second one is Liabilities
[95]
That is, how much the company has borrowed.
[99]
And the third is Shareholders' Equity
[102]
That is, how much money of the shareholders
[105]
is currently invested in the company.
[109]
We also call Shareholders Equity as Owners' Equity
[112]
or Just Equity
[113]
or Net worth or book value of the company.
[118]
In this way, a balance sheet tells us about the
[121]
assets, liabilities and shareholders' equity of the company
[125]
at the end of the financial year.
[128]
Friends, the first thing that we have to understand is
[132]
why balance sheet is called a balance sheet?
[135]
What exactly is the meaning of the word balance here?
[140]
Friends, a balance sheet is divided into 2 parts.
[144]
In one part, we show assets.
[147]
And in the second part, we show equity and liabilities.
[153]
And the value of these two parts is always equal.
[157]
That means, both the assets of the company
[159]
and the equity plus liabilities of the company are
[161]
always in the balance.
[164]
And that's why
[166]
a balance sheet is called the balance sheet.
[170]
If we write the same thing in an equation,
[173]
we will say, Assets = Equity + Liabilities.
[179]
And this equation is called the Balance Sheet Equation.
[183]
Friends, a balance sheet is made in 2 ways.
[188]
The first is the Horizontal Balance Sheet
[191]
and the second is the Vertical Balance Sheet.
[194]
In a horizontal balance sheet,
[196]
the balance sheet is divided horizontally into 2 parts.
[200]
Which has assets on the left side.
[204]
And the right side has both equity and liabilities.
[208]
Whereas, in the vertical balance sheet,
[210]
the balance sheet is divided vertically into 2 parts.
[215]
The first part generally consists of assets.
[218]
And below that, the second part has both equity and liabilities.
[222]
And almost all companies make vertical balance sheets.
[228]
Let us now understand the three sides — Assets, Liabilities and Equity.
[235]
Friends, on the asset side of the balance sheet,
[237]
companies show their total assets by dividing them into 2 parts.
[242]
The first one is called Current Assets.
[244]
And the second one is called Non-current Assets
[246]
or Long Term Assets.
[250]
Current assets include all the assets
[252]
that the company will use or will convert into cash
[256]
within a year.
[258]
Such as Cash and Cash Equivalents,
[261]
Short Term Investment,
[263]
Inventory,
[265]
Accounts Receivables, etcetera.
[268]
Whereas, all those assets come in non-current assets,
[271]
which the company will continue to use for more than a year.
[276]
Such as Land, Buildings,
[279]
Factories, Equipments, Long Term Investment etcetera.
[284]
And by adding both these types of assets,
[286]
companies show their total assets.
[290]
Friends, on the Equity and Liabilities side of the balance sheet
[293]
companies generally first show the liabilities.
[297]
And then the equity.
[299]
Companies divide also their total liabilities
[302]
into 2 parts like assets.
[306]
The first one is Current Liabilities
[308]
and the second is Non-current Liabilities
[311]
or Long Term Liabilities.
[314]
Current liabilities include all the liabilities
[317]
that the company has to repay within a year.
[321]
Such as Short-term Loans, Accounts Payables, etcetera.
[326]
Whereas, non-current liabilities include all the liabilities
[330]
that the company has to repay after one year.
[334]
Such as Long Term Loans.
[337]
And then by adding both these types of liabilities,
[340]
the companies show their total liabilities.
[344]
Friends, after liabilities, companies show equity
[349]
on the equity and liabilities side.
[351]
Which consists mainly of Equity Share Capital,
[354]
Other Equity
[355]
and Retained Earnings.
[358]
And by adding all these
[360]
companies show their total equity.
[364]
After this, companies show Total Equity and Liabilities
[368]
by adding Total Liabilities and Total Equity.
[372]
Which is always equal to total assets.
[376]
And by which the balance sheet remains balanced.
[381]
Friends, now it's time for today's task.
[384]
Today's task is that you have to
[387]
comment on this video and tell us that
[390]
What were the total assets of MRF Ltd
[393]
in the annual report for the year 2020?
[397]
So friends, this was our today's video on Balance Sheet.
[401]
In this, we learned
[402]
what is a balance sheet?
[404]
Why is it called a balance sheet?
[406]
And what information it has related to the company?
[410]
If you liked this video
[411]
then please like and share this video.
[413]
If you want to ask any question related to this video,
[416]
then write it in the comment box below.
[418]
To not miss our upcoming videos,
[420]
subscribe to our channel now.
[423]
And don't forget to press the bell icon.
[425]
thank you, friends. See you now in the next video.
[427]
Take care.
Most Recent Videos:
You can go back to the homepage right here: Homepage