BALANCE SHEET

To me most of the balance sheets are not that easy to understand,is there a simple way to identify a healthy balance sheet? Kindly advice friends

 

It is not easy but not difficult either. I am not an accountant but read balance sheets.

It should be noted that finding a perfect balancesheet is almost an impossible task. Good balance sheet is no guarantee that you will make money.

Few tips:-
1) Make sure that share capital is less.
2) Reserves should be increasing every year.
3) Debts should be zero or negligible as compared to the netprofit.
4) We want plenty of Assets.
5) Cash is very very very important.


Stock picking is an art and it has very less to do with numbers.

Focus more on the management.

 

Thanks a lot sir
Rajendran

 

With your permission,if I may add one interesting topical quote, in tjhis context, from Buffett --"The best buy have been when numbers almost tell you not to" @ Mr kharb ,@ Mr RAMA MURTHY SASTRY CHALLA et al--kindly react to this quote from Buffett.

 

Thats a nice and practical quote.
One should focus more on management than past numbers.

Bad management can ruin a good balance sheet and vice versa.

Thanks