We have seen profit and loss account in Issue-8, Balance sheet in Issue-9 and Relationship between balance sheet and profit & loss account in Issue-10. After understanding of Profit & loss account and Balance sheet, we move forward to the third financial statement in the current issue that is “Cash flow statement”.
“The cash flow statement shows how much cash comes in and goes out of the company over the quarter or the year.” – Investopedia
For Detail Issue, Click here —> SIMPLE IS BETTER – ISSUE -11 – CASH FLOW STATEMENT
We have seen profit and loss account in Issue-8 and Balance sheet in Issue-9. There is a relation between profit & loss account and balance sheet; which I am going to discuss in the current issue. We have to understand that relationship for better analysis of the financial statement and make a more wise investment decision.
No financial statement useful to us in isolation. We have to understand the impact of changes in one element on the other element of the financial statements which can be much use to us for knowing hidden stories of the companies. We can become better investors when we can able to understand the hidden truth behind the financial statements.
For Detail Issue, Click here —> SIMPLE IS BETTER – ISSUE -10 – RELATIONSHIP BETWEEN PROFIT & LOSS ACCOUNT AND BALANCE SHEET
We have seen profit and loss statement in issue 8. Now, in the current issue, I am going to discuss on the balance sheet. The balance sheet is another important financial statement which is essential for analyzing the financial strength of the person and of the company.
“A Balance Sheet is a statement of the financial position of a business which states the assets, liabilities, and owners’ equity at a particular point in time. In other words, the balance sheet illustrates your business’s net worth.” – The Balance
For Detail Issue, Click here —> SIMPLE IS BETTER – ISSUE -9 – OUR LIFE AND INVESTMENT – 3
We have seen in issue 7, that our life and businesses having a relationship & similarities and due to the understanding of our life help us to make better investment decisions.
In the current issue, I try to relate other similarities between our life and the business. I am going to explain profit and loss statement of the company with examples of our life which make it simpler to understand.
For Detail Issue, Click here —> SIMPLE IS BETTER – ISSUE -8 – OUR LIFE AND INVESTMENT – 2
I have talked about compounding and benefits of compounding in all of the previous issues of Simple is the better series. Now, from this issue, I am going to discuss similarities between our life & making an investment and how we can learn many things in investing from our life. We also can learn many things in our life of the equity investment.
We can able to create wealth while we have a thorough understanding of the business and the phase in which it is operating. We need to work hard on an understanding of the business for protecting damage to our wealth and also as an investor, we are becoming a partner of the business not an owner of a piece of paper.
For Detail Issue, Click here —> SIMPLE IS BETTER – ISSUE -7 – OUR LIFE AND INVESTMENT
In the last five issues, I have discussed regarding compounding and its power and how we can able to take benefits of compounding for a longer period of time. But for taking a benefit of compounding, we need a time – a long time; with a good health. Otherwise, we cannot able to enjoy our wealth or might not be there to enjoy our wealth. So, that, in issue 6, I am going to discuss on our real wealth which is our health and how it is as similar as we make an equity investment. Also, additionally to improve our health and wealth which can help us in a longer period of time.
By getting the benefits of compounding our money, we can be able to become a wealthy person, but if we do not have a good health then that compounded wealth is of no use. So, that we also need to compound our strong health for enjoying our compounded wealth in a longer period of time.
For Detail Issue, Click here —> SIMPLE IS BETTER – ISSUE -6 – HEALTH IS WEALTH
This time I come up with my 5th issue on mid-month due to few most money spending days of the month.😉 In My 5th issue, I am going to discuss regarding our temptation for spending money. In all my previous issues, I discussed regarding savings, investing and growing our investment for creating wealth. But for creating wealth, we must have to make savings and need to transform those savings into an investment.
If we always stay with our lifelong partner (Investing) then our lifelong partner (Investing) always stay with us in our bad time.
For Detail Issue, Click here —> SIMPLE IS BETTER – ISSUE -5 – TEMPTATION OF SPENDING
In my last 3 issues, I have written on how we can save money (Simple is Better – 1), Power of compounding (Simple is Better – 2) and Expectations v/s Reality (Simple is Better – 3). Now, in the current issue, I am going to talk about the transformation of our living style for creating a wealth.
I am going to try to explain this concept with one story, which can help us to understand the concept in a simple manner.
This story contains 2 families and both the families are living in the same city but they have a huge difference in thinking, living style etc.
For Detail Issue, Click here —> SIMPLE IS BETTER – ISSUE -4 – Mr. EMI V/S Mr. SIP
In issue 3, I am going to talk about distinguish between expectations and reality.
The majority of our acts is results of our expectations. We take many steps for fulfilling our expectations. Expectations always play a vital role in our life.
If we keep our expectation low/ reasonable then we can able to achieve more in reality and that help us to stay happy. We should keep in mind that we can able to achieve what we have expected but many a times results will not be in a way what we have actually expected.
For Detail Issue, Click here —> SIMPLE IS BETTER – ISSUE -3 – EXPECTATION V/S REALITY
In this 2nd issue, I am going to explain compounding, its effect and most importantly essentials for taking benefits of compounding in more detail.
Actually, many of us live life with a belief in our mind that compounding is only related to investment field (I was also in same belief). But when I thought about my life then I come to know that “Power of Compounding is Everywhere”. This power has performed a huge role in my life. According to me, from the our born to our current life and also in future, we have experience effects, benefits and entire process of compounding in our life.
Power of compounding beyond our imagination and this power can able to creates a huge miracle.
For Detail Issue, Click here —> SIMPLE IS BETTER – ISSUE -2 – POWER OF COMPOUNDING IS EVERYWHERE