Understanding a company’s balance sheet is crucial for equity investors aiming to assess financial health and growth potential.
Evaluation Checklist:
- Examine assets versus liabilities to gauge solvency
- Review debt-to-equity ratio for leverage risk
- Check cash reserves and working capital for operational strength
- Look at shareholder equity trends and retained earnings
- Compare year-on-year figures for consistency and growth trajectory
Sources: SEBI Investor Education Portal, Economic Times Finance Desk, Business Standard Equity Analysis Bureau