Enjoyed this video? Then subscribe to the channel right now, and watch the related videos on how to read the income statement and the cash flow statement: ua-cam.com/video/ToE-oggQiqQ/v-deo.html
So happy to hear that, Yesenia! I have gathered all the finance case studies in a playlist: ua-cam.com/video/PI9X5Ybek_E/v-deo.html Hope there will be many more videos that are helpful for you in there!
Your're welcome, Steve! Thank you for watching and commenting. I have done an income statement analysis and cash flow statement analysis for the same company as well, see links in the description.
This case study analysis was awesome , very helpful. Though an thought came into mind : wht do companies like google and apple have majority of their assets in liquid assets like cash ? Isnt cash depreciating in value ?
Great minds think alike! I have asked myself the same question many times. I think the #1 reason is that it gives them optionality: if they want to move fast on an acquisition or the development of a new technology, they can throw the cash at it that they already have available on their balance sheet. See the recent news of Microsoft acquiring Activision Blizzard, in an all-cash transaction valued at $68.7 billion. Second reason: they can make a good return on their money by putting most of it into marketable securities. See also my video on "how much cash does Apple have" ua-cam.com/video/5bWodpqRSYU/v-deo.html The numbers are from a few years ago, but I think the message is clear. Apple earned $4B in interest and dividend income in 2016. We can take a look at more recent annual reports to see where they are now. From what I know off the top of my head, Apple is now paying significant dividends to shareholders and doing large buybacks of their own stock (see the cash flow statement in the latest annual report).
Thank you for the feedback, Lissett! I covered many of the calculations in a video on financial ratio analysis ua-cam.com/video/MTq7HuvoGck/v-deo.html and another video on the current ratio ua-cam.com/video/dkiSWO2OYho/v-deo.html and one on the DuPont formula ua-cam.com/video/bhbDDSohJ84/v-deo.html
Thank you for your sharing of analysis of the 3 financial statements of Alphabet Inc. They are all professional presentations. 2 thumbs up!! Please allow me to be greedy a bit, may I request you to go further, based on those figures, to discuss the Discounted Cash Flow model as well the WACC. These two reports are important to forecast the value of the company in the near future, and also make the analysis as a whole perfect. By the way, you did the current ratio on the balance sheet, do we need to do ratios of other items? Do we need to do ratios on the other two financial statements as well? Thanks again for your kindness.
Hello Chris! I have made many more videos in the past two years since your comment, that could be of interest to you. Here is the link to my video on NPV and IRR ua-cam.com/video/Fw5-wccViOM/v-deo.html , my skeptical discussion of WACC ua-cam.com/video/1O-DbtVueMw/v-deo.html and my video on financial ratio analysis ua-cam.com/video/MTq7HuvoGck/v-deo.html
Very nice to hear that! Please watch the income statement and cash flow statement reviews for Alphabet Inc on my channel as well, then you get the full picture.
Is there any correlation between current ratio and CFOA? When the Current ratio is below 1 and CFOA is positive (and increased), can we say the company have liquidity problems?
I think the correlation is very remote. If CFOA is positive (i.e. a cash inflow), then the cash balance could go up, and the current ratio could go up. That only happens when CFOA is higher than the combined amount of CFIA (usually a cash outflow, related to Capital Expenditures) and CFFA (can be an inflow or outflow). Lots of "ifs" in those statements. If the current ratio is below 1, a company does not necessarily have liquidity problems. It could be that they are using any incoming cash to pay off debt as soon as possible, to save on interest expense in the future.
First , Thanks for a such useful topic. I have two related questions, First, the ratio number indicates at current ratio is valid for next three quarters, or to the end of fiscal year? İf the answer is the Fiscal year, then where we can get the most recent statistics include current ratio before 1st quarter report?
Hello Abdolreza! There is a difference between working inside a company as an employee in the finance department (where you have access to information on a monthly basis), and being an outside investor that has to rely on quarterly/annual publicly released information. As an outside investor, you get new quarterly information usually between 25 and 40 days after the end of the quarter (i.e. end of April for Q1 results). There are multiple datapoints you can use to calculate the current ratio: just based on the latest quarter end balance sheet, a 2-point average (average of end of latest fiscal year and previous fiscal year), and a 5-point average (average of latest 5 quarters to get full year view including any seasonality). More information on the current ratio in the video that I made specifically on this topic: ua-cam.com/video/dkiSWO2OYho/v-deo.html
@@TheFinanceStoryteller Woooow, thanks for such s great answer. May I ask you, whether if you have any videos which cover Valu Investment and Growth Investment criteria which lead us to pick an amazing stock? ( I prefer a combination of Value and Growth Investments methods.) Regards
Thank you! Here's the link to a video on dividend stocks vs growth stocks ua-cam.com/video/Wy7R-Gqfb6c/v-deo.html and a video on ETFs where I disclose the positions I have taken in my stock market portfolio 50/50 active/passive ua-cam.com/video/GBLNKbOgQ4w/v-deo.html
Thank you! Please subscribe to the channel, and enjoy the related income statement and cash flow statement analysis for Alphabet Inc: ua-cam.com/video/ToE-oggQiqQ/v-deo.html
If you go to the financial statements in the annual report, there is a heading saying "Alphabet Inc. CONSOLIDATED BALANCE SHEETS (In millions, except share amounts which are reflected in thousands, and par value per share amounts)". I didn't copy those over into the presentation/video to save space. The total assets per Dec 31, 2017, are stated as $197,295, which represents $197,295 million per the description above, or in short $197.3 billion.
hello. first i wanna say thanks about the video is very effective. second if i want to check how much company pay each year on the bond that the are sell, where i can find it? thanks
Thank you very much for your kind words! For information regarding Alphabet Inc about the amounts of debt issued, the due date of the debt, and the interest rates paid, you should turn to Note 5 to the financial statements, which is part of the "notes to consolidated financial statements", which in turn is part of item 8 "financial statements and supplementary data" of the 10-K annual report filing that you can find on the investor section of the compay's website.
@@TheFinanceStoryteller thanks for the quick answer. i find what you told me on 10-k items 8 "financial statements and supplementary data"" but unfortunately i miss the line of interest on bond. there maybe some other name for it? thanks in adveance
Either multiply the amount of the bond outstanding times the interest rate for each bond individually, or look for the line "interest expense" (the summation of all interest on bonds in one number) in the income statement. You will find that the line "interest income" (an income, positive) for companies like Alphabet Inc as well as Apple Inc is much bigger than "interest expense" (an expense, negative), due to the very large investment portfolio on the assets side of the balance sheet. ua-cam.com/video/5bWodpqRSYU/v-deo.html
Another great explanation in clear terms. I also watched your most helpful video on "how to make videos" but already knew that you followed a highly-structured approach, which seems to be based on Minto's pyramid principle. Are you in fact using this to structure your thinking and content? An observation in this particular video, and it is not a criticism, is that your 'key line' or 'To Do List' at about 1:20 mentions 5 items but you deal with the second item last. Is there a specific reason that you listed the items in this order but dealt with them in precisely the same sequence expect for the second item? Another question that I have is also from a non-financial person perspective. When I attended a (very poorly presented) course on financial statements I recall being told that the Net Profit is "a balancing item in the Balance Sheet". The example used on that course showed this clearly as a line item ('net profit for the period' ? equal in value to the line in the IS) but almost every published BS I look at does not list this as a line item. Could you please help me understand why and how does this line item for "net profit for the period" become 'distributed' among the line items shown in a typical BS? The current example company I am analyzing does however have an item for "cash and cash equivalents" that precisely matches with that in the CF statement.
Thank you once again for the kind words! Good observation on the sequence of reviewing the items on the "To Do" list. The way I structured this video was to make a generic list of items to review for any balance sheet, and then take the Alphabet Inc balance sheet and see in which sequence I would stumble upon them. Maybe I should have put "Current ratio" as #5, to make the flow more sequential. The statement of Net Profit being "a balancing item in the Balance Sheet" is true. Please watch my video on the relationship between the financial statements ua-cam.com/video/EjfyfDuQmdk/v-deo.html and my video on retained earnings ua-cam.com/video/xiwQh5E7JWQ/v-deo.html and it will all be revealed to you! ;-)
When you looked at liabilities, you expected the exact same total as the assets. Why? Wouldn't you expect that since they're doing well, they'll have more assets than liabilities? Even if it was close, why would it be exactly the same?
Assets = liabilities + equity. If a company is profitable, equity will grow, as the assets are growing quicker than the liabilities. The issue is of a semantic (wording/language) nature. Let me try to clear up some confusion I may have created in the video. In short, in English the word "liabilities" can mean the whole right-side of the balance sheet, or a big item on that right-side. In French, the total of the left-side of the balance sheet (what we own) is called "les actifs", and the total on the right-side (what we owe) "les passifs". In German, "die Aktiven", "die Passiven". In English the left-side is called "assets", the right-side "liabilities" (to indicate the total). Unfortunately, the word "liabilities" is also a synonym for "debt" (one item out of the total). Hope this helps!
Hi there -- Your videos are great, thank you. Can you help me understand the breakdown under Shareholders Equity? In other words, what does the following describe: Class A and Class B common stock, and Class C capital stock and additional paid-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000, Class C 3,000,000); 695,556 (Class A 299,242, Class B 46,636, Class C 349,678) and 694,782 (Class A 299,444, Class B 46,527, Class C 348,811) shares issued and outstanding
Thank you, Adam! I can help you to explain the different accounts in shareholders equity (retained earnings, treasury stock, etc.), they are explained in the videos on the following playlist: ua-cam.com/video/xiwQh5E7JWQ/v-deo.html Class A, class B, class C stock is not something I know a lot about.... this is more in the realm of corporate law than of finance. I assume it mostly has to do with voting rights, dividend payments, and special rights in case of challenging economic times for a company. Hopefully you can find some videos on other channels on that.
@@TheFinanceStoryteller Thank you :), yes my confusion specifically is around the numbers of shares Issued and Outstanding and why it seems to list two numbers (on every Google Financial Report); 695,556 and 694,782. If it only listed one of those it would make sense to me... 15,000,000 have been Authorised, and, say, 695,556 are Issued and Outstanding. But then it has another number of 694,782 that are Issued and Outstanding. Each of these numbers would make sense on their own (as that is the rough amount of Issued and outstanding shares), but it has two numbers. Again, thank you for your lessons. You are single handedly giving me a better education than my time at University
Hi Adam! Just checked the numbers you are referring to, and it confuses me as well. My apologies for not being able to answer your question! Thanks for the compliments, please tell your friends! :-)
@@TheFinanceStoryteller I figured it out. The first number is the previous 4th quarter (Dec 31st) stocks Issued and Outstanding, and the second number is the stocks issued and outstanding for the period under review.
Your time to do this is appreciated. But it is wrong and misleading. What you own is not what you owe. That means the company is worth nothing. What the company owns is it's assets and these are NOT equivalent to liabilities but liabilities plus equity (shareholder's if a public co). You would do well to honour your work and redo the voice over at least. Thanks
Thanks for the feedback, Jeffrey! I agree with you that the accounting equation is Assets = liabilities + equity. The issue is of a semantic (wording/language) nature. Let me try to clear up some confusion I may have created in the video. In short, in English the word "liabilities" can mean the whole right-side of the balance sheet, or a big item on that right-side. In French, the total of the left-side of the balance sheet (what we own) is called "les actifs", and the total on the right-side (what we owe) has its own term "les passifs". In German, "die Aktiven", "die Passiven". In English the left-side is called "assets", the right-side "liabilities" (to indicate the total on the right). Unfortunately, the word "liabilities" is also a synonym for "debt" (one item out of the total on the right). Once a video is posted, I cannot go back and redo the voice-over. I have however used the terms more clearly and consistently in later videos, such as my recent walk-through of the Walmart balance sheet: ua-cam.com/video/eIjCaeNm-Vk/v-deo.html
Saying you made a mistake would be far easier. The explanation quite frankly does you no justice. Anyway, apart from that your intentions in wanting to help people are very honourable.
Enjoyed this video? Then subscribe to the channel right now, and watch the related videos on how to read the income statement and the cash flow statement: ua-cam.com/video/ToE-oggQiqQ/v-deo.html
Enjoyed it!
@@hurdur6828 Great to hear that!!! Hope you find many more helpful videos on my channel.
thanks for the very insightful company analysis!
tech companies look almost like asset managers.
Thank you so much for the invaluable information that you provide. You have sparked a love for finance!
So happy to hear that, Yesenia! I have gathered all the finance case studies in a playlist: ua-cam.com/video/PI9X5Ybek_E/v-deo.html Hope there will be many more videos that are helpful for you in there!
Thank you! This was very clearly stated, and I will use this knowledge every day! You're awesome for doing this!
You're welcome, Lisa! Glad you enjoyed it. There are many more videos on various aspects of the balance sheet on my channel.
Great video once again.I would like to keep on praising you for your wonderful explanations.
I will keep thanking you for watching and commenting: THANK YOU!!!! ;-)
Hello, thank you for taking the time to teach this! Very well done.
Your're welcome, Steve! Thank you for watching and commenting. I have done an income statement analysis and cash flow statement analysis for the same company as well, see links in the description.
This case study analysis was awesome , very helpful. Though an thought came into mind : wht do companies like google and apple have majority of their assets in liquid assets like cash ? Isnt cash depreciating in value ?
Great minds think alike! I have asked myself the same question many times. I think the #1 reason is that it gives them optionality: if they want to move fast on an acquisition or the development of a new technology, they can throw the cash at it that they already have available on their balance sheet. See the recent news of Microsoft acquiring Activision Blizzard, in an all-cash transaction valued at $68.7 billion. Second reason: they can make a good return on their money by putting most of it into marketable securities. See also my video on "how much cash does Apple have" ua-cam.com/video/5bWodpqRSYU/v-deo.html The numbers are from a few years ago, but I think the message is clear. Apple earned $4B in interest and dividend income in 2016. We can take a look at more recent annual reports to see where they are now. From what I know off the top of my head, Apple is now paying significant dividends to shareholders and doing large buybacks of their own stock (see the cash flow statement in the latest annual report).
Thank You, it may really help to explain the calculations formulas.
Thank you for the feedback, Lissett! I covered many of the calculations in a video on financial ratio analysis ua-cam.com/video/MTq7HuvoGck/v-deo.html and another video on the current ratio ua-cam.com/video/dkiSWO2OYho/v-deo.html and one on the DuPont formula ua-cam.com/video/bhbDDSohJ84/v-deo.html
Thank you for your sharing of analysis of the 3 financial statements of Alphabet Inc. They are all professional presentations. 2 thumbs up!! Please allow me to be greedy a bit, may I request you to go further, based on those figures, to discuss the Discounted Cash Flow model as well the WACC. These two reports are important to forecast the value of the company in the near future, and also make the analysis as a whole perfect.
By the way, you did the current ratio on the balance sheet, do we need to do ratios of other items? Do we need to do ratios on the other two financial statements as well? Thanks again for your kindness.
Hello Chris! I have made many more videos in the past two years since your comment, that could be of interest to you. Here is the link to my video on NPV and IRR ua-cam.com/video/Fw5-wccViOM/v-deo.html , my skeptical discussion of WACC ua-cam.com/video/1O-DbtVueMw/v-deo.html and my video on financial ratio analysis ua-cam.com/video/MTq7HuvoGck/v-deo.html
Thanks for all your info
My pleasure, Rohit!
Thanks Mr financial story telller
You're welcome, Jamal!
Thank you this was great! Are there any videos explaining pension liabilities?
Not yet, Ben, but thanks for the suggestion! Complex topic, but could be worthwhile investigating.
This was absolutely great, thanks!
Very nice to hear that! Please watch the income statement and cash flow statement reviews for Alphabet Inc on my channel as well, then you get the full picture.
Is there any correlation between current ratio and CFOA? When the Current ratio is below 1 and CFOA is positive (and increased), can we say the company have liquidity problems?
I think the correlation is very remote. If CFOA is positive (i.e. a cash inflow), then the cash balance could go up, and the current ratio could go up. That only happens when CFOA is higher than the combined amount of CFIA (usually a cash outflow, related to Capital Expenditures) and CFFA (can be an inflow or outflow). Lots of "ifs" in those statements.
If the current ratio is below 1, a company does not necessarily have liquidity problems. It could be that they are using any incoming cash to pay off debt as soon as possible, to save on interest expense in the future.
just wanna say greattttt Video!!! Thanks so much!!!
Thank you for watching! Have you seen the related videos on Alphabet Inc cash flow statement and Alphabet Inc income statement as well?
@@TheFinanceStoryteller Yes I have seen them :)
First , Thanks for a such useful topic.
I have two related questions,
First, the ratio number indicates at current ratio is valid for next three quarters, or to the end of fiscal year?
İf the answer is the Fiscal year, then where we can get the most recent statistics include current ratio before 1st quarter report?
Hello Abdolreza! There is a difference between working inside a company as an employee in the finance department (where you have access to information on a monthly basis), and being an outside investor that has to rely on quarterly/annual publicly released information. As an outside investor, you get new quarterly information usually between 25 and 40 days after the end of the quarter (i.e. end of April for Q1 results). There are multiple datapoints you can use to calculate the current ratio: just based on the latest quarter end balance sheet, a 2-point average (average of end of latest fiscal year and previous fiscal year), and a 5-point average (average of latest 5 quarters to get full year view including any seasonality).
More information on the current ratio in the video that I made specifically on this topic: ua-cam.com/video/dkiSWO2OYho/v-deo.html
@@TheFinanceStoryteller Woooow, thanks for such s great answer.
May I ask you, whether if you have any videos which cover Valu Investment and Growth Investment criteria which lead us to pick an amazing stock? ( I prefer a combination of Value and Growth Investments methods.)
Regards
Thank you! Here's the link to a video on dividend stocks vs growth stocks ua-cam.com/video/Wy7R-Gqfb6c/v-deo.html and a video on ETFs where I disclose the positions I have taken in my stock market portfolio 50/50 active/passive ua-cam.com/video/GBLNKbOgQ4w/v-deo.html
Solid!
Thank you! Please subscribe to the channel, and enjoy the related income statement and cash flow statement analysis for Alphabet Inc: ua-cam.com/video/ToE-oggQiqQ/v-deo.html
How do you know what people have rounded their balance sheets to? How do you know if 7,100 is 7,100 , 7million or 7billion?
If you go to the financial statements in the annual report, there is a heading saying "Alphabet Inc. CONSOLIDATED BALANCE SHEETS (In millions, except share amounts which are reflected in thousands, and par value per share amounts)". I didn't copy those over into the presentation/video to save space. The total assets per Dec 31, 2017, are stated as $197,295, which represents $197,295 million per the description above, or in short $197.3 billion.
excellent job. thank you
You're welcome! I have a cash flow statement analysis and income statement analysis for Alphabet Inc in the same series.
hello.
first i wanna say thanks about the video is very effective.
second if i want to check how much company pay each year on the bond that the are sell,
where i can find it?
thanks
Thank you very much for your kind words! For information regarding Alphabet Inc about the amounts of debt issued, the due date of the debt, and the interest rates paid, you should turn to Note 5 to the financial statements, which is part of the "notes to consolidated financial statements", which in turn is part of item 8 "financial statements and supplementary data" of the 10-K annual report filing that you can find on the investor section of the compay's website.
@@TheFinanceStoryteller thanks for the quick answer.
i find what you told me on 10-k
items 8 "financial statements and supplementary data""
but unfortunately i miss the line of interest on bond.
there maybe some other name for it?
thanks in adveance
Either multiply the amount of the bond outstanding times the interest rate for each bond individually, or look for the line "interest expense" (the summation of all interest on bonds in one number) in the income statement. You will find that the line "interest income" (an income, positive) for companies like Alphabet Inc as well as Apple Inc is much bigger than "interest expense" (an expense, negative), due to the very large investment portfolio on the assets side of the balance sheet. ua-cam.com/video/5bWodpqRSYU/v-deo.html
@@TheFinanceStoryteller thank you very nuch
Another great explanation in clear terms. I also watched your most helpful video on "how to make videos" but already knew that you followed a highly-structured approach, which seems to be based on Minto's pyramid principle. Are you in fact using this to structure your thinking and content? An observation in this particular video, and it is not a criticism, is that your 'key line' or 'To Do List' at about 1:20 mentions 5 items but you deal with the second item last. Is there a specific reason that you listed the items in this order but dealt with them in precisely the same sequence expect for the second item? Another question that I have is also from a non-financial person perspective. When I attended a (very poorly presented) course on financial statements I recall being told that the Net Profit is "a balancing item in the Balance Sheet". The example used on that course showed this clearly as a line item ('net profit for the period' ? equal in value to the line in the IS) but almost every published BS I look at does not list this as a line item. Could you please help me understand why and how does this line item for "net profit for the period" become 'distributed' among the line items shown in a typical BS? The current example company I am analyzing does however have an item for "cash and cash equivalents" that precisely matches with that in the CF statement.
Thank you once again for the kind words! Good observation on the sequence of reviewing the items on the "To Do" list. The way I structured this video was to make a generic list of items to review for any balance sheet, and then take the Alphabet Inc balance sheet and see in which sequence I would stumble upon them. Maybe I should have put "Current ratio" as #5, to make the flow more sequential.
The statement of Net Profit being "a balancing item in the Balance Sheet" is true. Please watch my video on the relationship between the financial statements ua-cam.com/video/EjfyfDuQmdk/v-deo.html and my video on retained earnings ua-cam.com/video/xiwQh5E7JWQ/v-deo.html and it will all be revealed to you! ;-)
47 % of equity to the balance sheet , is it good ?
Yes, that's very good. But in relative terms not as high as Facebook's percentage, see my comparison: ua-cam.com/video/ya7rRZJCLEc/v-deo.html
When you looked at liabilities, you expected the exact same total as the assets. Why? Wouldn't you expect that since they're doing well, they'll have more assets than liabilities? Even if it was close, why would it be exactly the same?
Assets = liabilities + equity. If a company is profitable, equity will grow, as the assets are growing quicker than the liabilities.
The issue is of a semantic (wording/language) nature. Let me try to clear up some confusion I may have created in the video. In short, in English the word "liabilities" can mean the whole right-side of the balance sheet, or a big item on that right-side. In French, the total of the left-side of the balance sheet (what we own) is called "les actifs", and the total on the right-side (what we owe) "les passifs". In German, "die Aktiven", "die Passiven". In English the left-side is called "assets", the right-side "liabilities" (to indicate the total). Unfortunately, the word "liabilities" is also a synonym for "debt" (one item out of the total).
Hope this helps!
The Finance Storyteller: Thanks! Now that I recheck, you do make this point multiple times in the video, I just wasn't paying close enough attention.
Hi there -- Your videos are great, thank you.
Can you help me understand the breakdown under Shareholders Equity? In other words, what does the following describe:
Class A and Class B common stock, and Class C capital stock and additional paid-in capital, $0.001 par value per share: 15,000,000 shares authorized (Class A 9,000,000, Class B 3,000,000, Class C 3,000,000);
695,556 (Class A 299,242, Class B 46,636, Class C 349,678) and 694,782 (Class A 299,444, Class B 46,527, Class C 348,811) shares issued and outstanding
Thank you, Adam! I can help you to explain the different accounts in shareholders equity (retained earnings, treasury stock, etc.), they are explained in the videos on the following playlist: ua-cam.com/video/xiwQh5E7JWQ/v-deo.html Class A, class B, class C stock is not something I know a lot about.... this is more in the realm of corporate law than of finance. I assume it mostly has to do with voting rights, dividend payments, and special rights in case of challenging economic times for a company. Hopefully you can find some videos on other channels on that.
@@TheFinanceStoryteller Thank you :), yes my confusion specifically is around the numbers of shares Issued and Outstanding and why it seems to list two numbers (on every Google Financial Report); 695,556 and 694,782.
If it only listed one of those it would make sense to me... 15,000,000 have been Authorised, and, say, 695,556 are Issued and Outstanding. But then it has another number of 694,782 that are Issued and Outstanding. Each of these numbers would make sense on their own (as that is the rough amount of Issued and outstanding shares), but it has two numbers.
Again, thank you for your lessons. You are single handedly giving me a better education than my time at University
Hi Adam! Just checked the numbers you are referring to, and it confuses me as well. My apologies for not being able to answer your question! Thanks for the compliments, please tell your friends! :-)
@@TheFinanceStoryteller I figured it out. The first number is the previous 4th quarter (Dec 31st) stocks Issued and Outstanding, and the second number is the stocks issued and outstanding for the period under review.
Thanks, that makes a lot of sense!
👍👍👍
Your time to do this is appreciated. But it is wrong and misleading. What you own is not what you owe. That means the company is worth nothing. What the company owns is it's assets and these are NOT equivalent to liabilities but liabilities plus equity (shareholder's if a public co). You would do well to honour your work and redo the voice over at least. Thanks
Thanks for the feedback, Jeffrey! I agree with you that the accounting equation is Assets = liabilities + equity. The issue is of a semantic (wording/language) nature. Let me try to clear up some confusion I may have created in the video. In short, in English the word "liabilities" can mean the whole right-side of the balance sheet, or a big item on that right-side. In French, the total of the left-side of the balance sheet (what we own) is called "les actifs", and the total on the right-side (what we owe) has its own term "les passifs". In German, "die Aktiven", "die Passiven". In English the left-side is called "assets", the right-side "liabilities" (to indicate the total on the right). Unfortunately, the word "liabilities" is also a synonym for "debt" (one item out of the total on the right).
Once a video is posted, I cannot go back and redo the voice-over. I have however used the terms more clearly and consistently in later videos, such as my recent walk-through of the Walmart balance sheet: ua-cam.com/video/eIjCaeNm-Vk/v-deo.html
Saying you made a mistake would be far easier. The explanation quite frankly does you no justice. Anyway, apart from that your intentions in wanting to help people are very honourable.