Balance Sheet (Part 1)

Once a year publicly listed companies are required to provide an Annual Report to its share holders. This report contains all the pertinent information to inform the share holders about the health of the company. In the beginning of the annual report we find charts followed by a message from the Chief Executive Officer. For the share holders two most important statements in the annual report are 'Balance Sheet" and “Income Statement". Income statement is also known as Profit and Loss Statement". Here I will try to explain some of the items included in the balance sheet.

 We will start with a balance sheet of any one public company.  Here I am going to present balance sheet of Google.

Balance Sheet
View: Annual Data Quarterly Data All numbers in thousands   PERIOD ENDING 31-Dec-08 31-Dec-07 31-Dec-06   Assets Current Assets   Cash And Cash Equivalents 8,656,672 6,081,593 3,544,671   Short Term Investments 7,189,099 8,137,020 7,699,243   Net Receivables 2,928,297 2,376,312 1,352,053   Inventory - - -   Other Current Assets 1,404,114 694,213 443,880   Total Current Assets 20,178,182 17,289,138 13,039,847 Long Term Investments 85,160 1,059,694 1,031,850 Property Plant and Equipment 5,233,843 4,039,261 2,395,239 Goodwill 4,839,854 2,299,368 1,545,119 Intangible Assets 996,690 446,596 346,841 Accumulated Amortization - - - Other Assets 433,846 168,530 114,455 Deferred Long Term Asset Charges - 33,219 -   Total Assets 31,767,575 25,335,806 18,473,351   Liabilities Current Liabilities   Accounts Payable 2,084,006 1,857,529 1,199,451   Short/Current Long Term Debt - - -   Other Current Liabilities 218,084 178,073 105,136   Total Current Liabilities 2,302,090 2,035,602 1,304,587 Long Term Debt 890,115 - - Other Liabilities 294,175 580,276 68,497 Deferred Long Term Liability Charges 42,333 30,249 60,427 Minority Interest - - - Negative Goodwill - - -   Total Liabilities 3,528,713 2,646,127 1,433,511   Stockholders' Equity Misc Stocks Options Warrants - - - Redeemable Preferred Stock - - - Preferred Stock - - - Common Stock 315 313 309 Retained Earnings 13,561,630 9,334,772 5,133,314 Treasury Stock - - - Capital Surplus 14,450,338 13,241,221 11,882,906 Other Stockholder Equity 226,579 113,373 23,311   Total Stockholder Equity 28,238,862 22,689,679 17,039,840   Net Tangible Assets $22,402,318 $19,943,715 $15,147,880
All the numbers shown above are in thousands. In this blog I will give you details only about the main items. Additional details will be discussed in the future blogs. Look at the second line in the balance sheet under the heading Period Ending. Here the numbers are shown for the years ending in December of 2006, 2007 and 2008.   Let us look at the 10th line with the heading Total Current Assets. Note that the total current assets for the year 2008 were approximately $20 billion, which is more than $17 billion for the year 2007 and $13 billion for the year 2006. This indicates that the company’s results are improving.  Fifth line from the top shows Cash And Cash equivalents. Here also we see $8 billion for the year 2008 which is more than $6 billion for the year 2007 and $3 billion for the year 2006. These numbers also show that the company has good amount of cash to take care of unforeseen circumstances.