Balance Sheets: The Good, the Bad and the In-Between
While a company's income statement presents the current results of a company's operation, the balance sheet depicts the financial strength (or weakness) of a company.
So what's in a balance sheet? A company's balance sheet has three main sections:- Assets: Items of economic value that are owned by a company.
- Liabilities: A company's financial obligations.
- Equity: Sometimes referred to as shareholders' equity, this represents the net accounting value of the company.
(first quarter of 2007), which are available at company Web sites and summarized on Yahoo! Finance and TheStreet.com.
How to Spot a Weak Balance Sheet
Let's start with an example of a truly horrible balance sheet. I have several nominees for this ignominious honor: Six Flags (SIX), Level 3 Communications (LVLT), Sirius Satellite Radio (SIRI) and XM Satellite Radio (XMSR). (How ironic it is that Sirius and XM, two companies with some of the worst balance sheets, are attempting to merge? Two wrongs won't make a right.)TheStreet Premium Services For Personal Service: 877-471-2967
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