TRANSCRIPT
Click any timestamp to jump
Welcome back. When we left off, we were finished up with the income statements.
Let's move to the Balance Sheet whereby we're going to take a couple of different approaches.
For the Cash and Cash equivalents, we are going to use an equals previous plus the change that's going to be associated
that we're going to find by navigating to our Statement of Cash Flows.
And we'll pick the increase decrease in Cash amount.
And notice I am working in the template, so I already have this set up as accounting format italicized with no decimals.
Accounts receivable is going to work a little bit differently in that it's going to be equals.
We'll go to our Income Statement.
We'll find our Net Sales number and we're going to divide it off the Assumptions page by 365 to get average daily Sales,
which then we multiply by the number of days our Sales sit in our receivables before they're collected.
Inventories will be similar, but we'll drive them by being equals from our Income Statement,
not on Net Sales this time, but on the Cost of Sales because that's what goes into our inventory.
We divide that then also by the assumption for calendar days of 365.
And then we take that average daily inventory and we multiply it by the 100 days that something sits in our inventories for.
Our other current Assets will be a little bit different and that will be equals to off of the Income Statement.
We're going to drive that again by the Net Sales number and then multiply that on our Assumptions by this other current Assets as a percent of Net Sales.
Let's add up those numbers in the top to get our total current Assets before we move to our long terms,
for which we'll go back to a previous plus change by doing equals previous plus from the Assumptions.
If we acquire new capital, we would add it. If we got rid of capital, we would subtract then dispositions.
And then we subtract off the value of the Depreciation so that you can see we're investing in replenishment of our PP&E net.
So our total Assets will be equal to our total current Assets plus our property plant and equipment.
Moving to the Liabilities and shareholders Equity piece, we're going to go back to using some of those daily methodologies where accounts payable will be equals to.
We'll go to our Income Statement. We'll find that Cost of Sales. We'll divide that again by 365.
That's our average daily payables. And then we'll multiply that by the number of days something sits in the payable.
Our accrued Liabilities is a percent of Sales. So we'll do equals. We find 2026.
And then that Net Sales number we take by that accrued Liabilities 15 percent occupancy of that Net Sales number.
Our other current Assets will be similar. So we'll go equals. Find that Sales off the Income Statement.
And then multiply that again by our other current Liabilities at five percent, which is our percent of Net Sales.
Let's add those up to get our total current Liabilities. Our long term Debt will be equals to the previous year.
We would add to that then any assumption that we would make for new borrowing.
But we would subtract from that borrowing any Debt that we paid back so that our total Debt would be the total current Liabilities plus the long term Debt.
The shareholders Equity is going to involve multiple components that are change oriented.
So we'll do equals. We'll find that previous year shareholders Equity.
Then we will add to that from the Income Statement the amount of my new Net Income in 2026.
Then I'm also going to add to that off the Assumptions page any Equity that I would issue.
I would subtract, though, any Cash that I spent to buy back Equity and also subtract the dividends that I would pay because those would also decrease my Cash.
So my Liabilities plus shareholders Equity would be my Debt plus my shareholders Equity.
And on the bottom, we just check to see to our balances balance out.
And if I do equals the total Assets and Liabilities together, I see that the numbers we're going to try that again.
Does my total Liabilities and shareholders Equity equal to my Assets?
And I can see my numbers do not add up yet.
And if I copy and paste this all the way across, I'm going to see that that's true.
I have a Balance Sheet that does not balance out quite yet.
So in the next video, we're going to see if the statement of Cash Flow completion doesn't help us balance our Balance Sheet.
We'll see you there.
45 segments