3. What is a Balance Sheet and Margin of Safety

Download Preston’s 1 page checklist for finding great stock picks:

Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location:

In lesson three, we explored the importance of a Balance Sheet. We learned that current assets and liabilities are income streams and obligations, respectively, that a company will receive or pay during the next 12 months. We also learned that the equity of a business was equal to the total assets minus the total liabilities. After determining a company’s equity, we can use that important number to determine the margin of safety that’s associated with buying a business.

Articles You May Like

How to Choose a HELOC When Interest Rates Are Volatile
GameStop Is the One Meme Stock to Avoid at the Moment
Even the Energy Boom Can’t Save Camber Energy Stock
Occidental Petroleum Stock Rallies Are Opportunities to Exit
Quant Ratings Updated on 97 Stocks