I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

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Thursday, 16 March 2017

You Know Company's Balance Sheet In Its Simplest Form???

"Less Analyzing. More Investing!" - Createwealth8888

"To make money from the stock market, it is not how well you analyze it. It is how well you invest into it." - Createwealth8888

Company's Balance Sheet?

How many retail understand how a company grows its balance sheet in a simple layman understanding without an accounting background?

Uncle8888 has asked a few retail to think about it. This is the minimum level that retail must fully understand balance sheet in its simplest form; otherwise; how you analyze arh?

Surprisingly; even a few seasonal retail couldn't explain balance sheet in its simplest form; and they think they understand financial statement well to know the company's  future and business.

OK. Enough of poke!

Sorry. sorry. sorry!


  1. CW,

    I also kind of dun understand your question... Maybe a bit more specfic?

    Simplest form is not a universal understood concept you know?

    1. Sillyinvestor,

      Simplest form meant exactly what it is - stripped down to the basics.

      Your problem is you think too much!

      What universally understood concept? We are not talking about XIRR here ;)

      LP has just given you the explanation of what a balance sheet is in simple layman language :)

      Of course I know why you asked.

      You must be thinking cannot be so simple. There must be a trick question somewhere ;)

    2. Hi SMOL and CW,

      I mean no offense. If construe that way, I apologize.

      I just happen to ask what comes to my mind.


      U are half right. I am egolistic, but did not think too much, had I think a bit more, I would not have reply.

      I really thought huh? What simplest is there is balance sheet? Balance?

    3. Had I not been egolistic, the question would have been phrased differently.

      So my bad.

      So it's important to have either, to save the embrassement I face now. Either think deeper to find the answer myself or humble to phrase the qn properly.


    4. Sillyinvestor,

      I ended my sentences with lots of :) and ;)

      I'm playing with you.

      The hardest past to explain Balance Sheet to non-accountants is WHY must Asset and Liabilities be "balanced" on the Balance Sheet???


      And yes, I'm teasing you again ;)

      Just as long you can make 30-40% for your position trades (hold 4 months sell; hold 12 months sell) who cares right?

      Yes, its a rare compliment to your Venture and YZJ profitable trades. Buy the dip works! (Until it doesn't)

      Seems like B, LP, and you like this style ;)

    5. Smol,

      U dun know, recently I seem to ruffles a lot of feathers when I ask questions. Not sure if it's my tone and I had ask questions that they can't answer.

      U know me, I egolistic but not arrogant, dun know why people get defensive

    6. Sillyinvestor,

      Ah! That's an art too! How to ask questions ;)

      Its a big topic. You should know as its part of pedagogy as in the Socratic Method.

      I'll just drop a few keywords and that my help:

      1) Culture. You don't phrase the same question to a senior like you'll be asking a junior.

      2) Power structure. You asking as a HOD, trainee, customer, buyer matters.

      3) Context. You clowning around, trying to make the other person lose face, or genuinely don't know ask? Only you know.

      You have already half-answered your question: "I had ask questions that they can't answer".

      Try asking more such questions to your principal see whether you'll get your pay increment end of the year!


      P.S. It's part of EQ. Trust by verify once can already. Don't keep verifying over and over once you got the answer ;)

  2. Hi bro8888,

    Balance sheet, in simplest terms, is just a sheet of paper detailing how much you have (assets) and how much you owe (liabilities) and how much is remaining (equities), at a particular point in time.

    1. Agree! but I guess CW version is if the remaining (equity) is generating cash flow or not? If not, then jiat lat.

    2. So we call this "good debt"? lol...

  3. CW,

    I think a bigger problem than poor financial literacy is poor reading skills ;)

    The main thrust of your post is the QUESTION you've asked:

    "How many retail understand how a company GROWS its balance sheet in a simple layman understanding without an accounting background?"

    Guess what?

    "Seasoned retail investors" care more about proving you wrong that they know HOW to DEFINE what a balance sheet is.

    Talk about big egos...


    Next time write with crayons.

    Those who can't "read" should stay away from fundamental analysis and stick with pictures and cartoons as in technical analysis ;)

    1. Topics or ideas for BigScribe to pick up for next talk session. LOL!


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