Enjoyed this video? Then subscribe to the channel right now, and watch the related video explaining the current ratio (used in reviewing liquidity on the balance sheet) with lots of examples: th-cam.com/video/dkiSWO2OYho/w-d-xo.html
we are to analyze two companies their financial position's solvency,liquidity ,and flexibility. I have no idea how😔😔😔😔😔😔f ever u know how please,even just a brief explanation
Hi! Have a look at the related video on liquidity as well: th-cam.com/video/XtjS7CfUSsA/w-d-xo.html The current ratio is a good one to use to evaluate liquidity, however be careful with the interpretation as it can be quite subjective: th-cam.com/video/dkiSWO2OYho/w-d-xo.html For solvency, equity as percentage of the balance sheet total is a good indicator, as well as the debt-to-equity ratio, I have used that as part of my balance sheet analysis of Apple: th-cam.com/video/J_1F8GoLOI8/w-d-xo.html You can skip forward using the chapters. Hope this helps!
Not quite. Insolvency is having negative equity: liabilities bigger than assets. See also my video on the accounting equation th-cam.com/video/OYql7Y9NnBg/w-d-xo.html
@@TheFinanceStoryteller I'd compare it to the financial collapse of 2009. If a person buys a house and the economy collapses, even if they keep their job and still pay the bills, the house might become worth less than the loan. The debt obligation hasn't changed, and neither has the owner's ability to pay the debt, but they would still be insolvent because the value of the underlying asset is now worth less than the debt obligation. And as such, if they lost their job and filed bankruptcy, selling the house wouldn't be enough to pay off the loan. At this point the bank has to write that debt off as a loss, or it gets restructured or paid by liquidating other assets.
Enjoyed this video? Then subscribe to the channel right now, and watch the related video explaining the current ratio (used in reviewing liquidity on the balance sheet) with lots of examples: th-cam.com/video/dkiSWO2OYho/w-d-xo.html
The only video I'm able to understand on this topic all over the internet, is yours.
Thank you very much.
Wow, that is a beautiful compliment. Thank you for watching and commenting. Please subscribe to the channel, and spread the word!!! :-)
Excellent video , but it would be better if you showed also the formulas for solvency and liquidity
I've been watching your videos for a few days now and I just want to say you do a excellent job.
Thank you.
Welcome! Great to hear that. Please subscribe, and spread the word to friends and colleagues.
Great video, thank you ❤.
You are so welcome!
So Restructuring is a Write Off 😂👍🏻 thats so true!!!
Amazing explanation, as usual!
Restructuring in the sense of debt restructuring to create financial breathing room for a company. ;-)
Best explanation I got so far. Thanks
So happy to hear that!!! Your comment helps me to stay motivated to make new videos. Thank you!
Thank you very much again ❤️ I love the examples you gave. It had helped me so much ❤️
Glad it was helpful! Thank you for watching and commenting. 🙂
thank you btw for this video! Great illustration!
You're very welcome! :-)
Hello Netherlands!
Goedemorgen André! How is Spijkenisse today? 😊
we are to analyze two companies their financial position's solvency,liquidity ,and flexibility. I have no idea how😔😔😔😔😔😔f ever u know how please,even just a brief explanation
Hi! Have a look at the related video on liquidity as well: th-cam.com/video/XtjS7CfUSsA/w-d-xo.html
The current ratio is a good one to use to evaluate liquidity, however be careful with the interpretation as it can be quite subjective: th-cam.com/video/dkiSWO2OYho/w-d-xo.html
For solvency, equity as percentage of the balance sheet total is a good indicator, as well as the debt-to-equity ratio, I have used that as part of my balance sheet analysis of Apple: th-cam.com/video/J_1F8GoLOI8/w-d-xo.html You can skip forward using the chapters.
Hope this helps!
well explained
Hello Reece! Great that you found this one as well. It was an eye-opener for me to study how the "road to bankruptcy" works...
Thanks
Happy to help!
Very well explained 🐱
Glad it was helpful!
Hello Story teller, can you explain analysis of banking sector and banks?
Sorry, but that's not my area of expertise.
@@TheFinanceStoryteller atleast how to analyze the p&l, balance sheet and cash flow of banks?
Maybe someday, but not anytime soon....
@@TheFinanceStoryteller oh... Alright.. Thank you
ty!!!!
Those who miss this..............will lose their liquidity.
So basically solvency is possessing liquid equity? And insolvency is being in debt?
Not quite. Insolvency is having negative equity: liabilities bigger than assets. See also my video on the accounting equation th-cam.com/video/OYql7Y9NnBg/w-d-xo.html
@@TheFinanceStoryteller I'd compare it to the financial collapse of 2009. If a person buys a house and the economy collapses, even if they keep their job and still pay the bills, the house might become worth less than the loan. The debt obligation hasn't changed, and neither has the owner's ability to pay the debt, but they would still be insolvent because the value of the underlying asset is now worth less than the debt obligation. And as such, if they lost their job and filed bankruptcy, selling the house wouldn't be enough to pay off the loan. At this point the bank has to write that debt off as a loss, or it gets restructured or paid by liquidating other assets.
faen det var bra video
Thank you! :-)