Name: 財務諸表です。バランスシート (Financial Statements: The Balance Sheet)
Uploaded: 2021-01-14T06:55:59.000Z
Duration: 9 min 27 s
Description: VoiceTubeの動画で発音を聞きながら英語表現を覚えよう！学べる英語：

Hello, this is Bob Salvin, the host of the AIChE e- learning course Economic Evaluation for Chemical  Engineers.

現在進行形

In this series of short videos we are going to  discuss financial statements,

Financial statements are the reports that a  company will issue on a quarterly and fiscal  year-end basis

for describing its financial situation and  performance for that particular reporting period.

There are three major reporting statements: the  balance sheet,

the income statement, and the cash flow  statement.  These three statements work  together hand in hand.

They also must adhere to an accounting system  known as GAPP or

Generally Accepted Accounting Principles. This  system was put in place to ensure that

from period to period and among all companies,  the terms that are used are defined in the same  way,

and these reports are subject to external audit to  ensure that they do adhere to the GAPP system.

So let's take a look at the Balance Sheet and  some of the major balance sheet items.

We'll begin with the asset side. Assets will  include cash;

accounts receivables, or the money that is owed  to the company from its customers for

goods and services that it has purchased but has  not yet paid for;

inventories, such as raw materials and finished  goods; the fixed assets, or property, plant and  equipment (PP&E);

investments of the company may have made; as  well as some other intangibles. We'll also see  when we go through an example that there are

other categories for assets which we will not  discuss here, but I would refer you to an  accounting text

to get a better understanding of what those items  are.

The liability side will include accounts payables;  this is the money that the company owes to its  suppliers for

goods and services it has purchased but has not  yet paid for; any short and long term debt; plus

any other commitments that the company may  have made.

And finally we get to a concept known as  stockholder's equity. Stockholder's equity will  include the stock that

forms the com equity structure of the company;  it's usually put on the balance sheet at par value;

any additional paid in capital; this would be the  investments that were made above the par value  in the stock;

and it will also include a concept known as  retained earnings,

which is a portion of the net income which is set  aside for use in the business.

The concept of the balance sheet comes from the  fact that the assets

must equal the sum of the liabilities and  stockholders equity,

Before we begin, though, I want to bring up the  concept of depreciation; this is a very important  one that

will show up here in our balance sheet  discussion as well as later on in our discussion  on income and cash flow.

Depreciation is a noncash measure that reflects  the actual use of an asset.

Assets are assumed to have a finite life; each  asset may have a different life.

The depreciation will began when an asset is  finally placed into service and you take a charge  for that particular reporting period

for the use of that asset. And as I noted, this  number will affect the earnings when we look at  the income statement in a future video,

and is the reported value for the assets that are  shown on the balance sheet.

The example I have chosen to show you is the  balance sheet for the Dow Chemical Company, a  major U.S. corporation, for the year ending 2014,

that's the calendar year 2014; for Dow the fiscal  year is a calendar year basis.

Just a few things before we began. You can see  that Dow has put two years on the balance  sheet; this makes it a little bit easier for you to

make a comparison of between 2013 and 2014,  and all the numbers and are being shown in  millions of dollars.

The asset side of the balance sheet will begin  with current assets.  Current assets will include

things like the cash that we talked about,  accounts receivables, inventories,

and you can see for Dow the total of these  numbers is a little over $24 billion, slightly lower than the the year prior but not too different.

Let's then turn our attention to the next section  which are the investments Dow has made

in various items such as affiliates that they don't  consolidate into their own numbers,

and we can see that number is fairly significant  at a little bit over $7 billion.

The next part of the balance sheet is something  that we should be familiar with.

This is known as PP&E or property, plant, and  equipment.  Dow has chosen to call it just simply  property.

This section of the balance sheet will show  basically two numbers: the investments that Dow  has made in the fixed assets

which is $55 billion, and then as we've noted,  you're going to take this depreciation charge as  accumulated from the time the assets

have been placed in service and you get down to  a net property number, and in the case for Dow,  that's around $18 billion.

The final section of the asset side of the balance  sheet are the other assets.

And we can see a line item for goodwill which is  the largest number on there. And there are some  other specific items to Dow,

and then there are some other items that you will  see on most balance sheets, and again I would  refer each an accounting text

and the notes to the financial statements if you  want to learn a little bit more about what these  other items are.

The total, then, for Dow's asset side is around  $68.8 billion.

Let's move on to the liability side of the balance  sheet, the liability and equity side of the balance  sheet.

And the corollary to current assets is current  liabilities,

and the corollary to current assets is current  liabilities

and you can see that total is around $11.6 billion  and it will include such items as notes payable,

these are short term borrowings that the  company has made and is owed fairly quickly;

some long-term debt which is due in one year  and of course the large item of

accounts payables that we had discussed  earlier, the money that the company owes to its  suppliers;

and again there are some other items that we're  not going to get into here. The next of major item  of course is the long-term debt

and for Dow's case it's around $19 billion, $18.8  billion, and it's up about $2 billion from the year  before.

And will see that later on we discuss the cash flow statement as a source of cash,  that additional debt that it has taken on.

There is another section, now, known as  noncurrent liabilities; we're not going to get into  these.

Again some of these are specific to Dow, and  that number is fairly significant again, at $14.8  billion.

Dow then goes into showing the stockholders'  equity portion of the balance sheet.

These are the investments that have been made  in the company. We can see some preferred  stock; we can see the common stock at

par value, the additional paid-in capital, and the  retained earnings; there are some subtractions  again but we're not going to get into those details.

But you can see the total equity side is around  $23.4 billion.

And then if you add the liabilities together with the  equity, again the concept of the balance comes  in,

and you can see that number of 68.8 billion; if you recall the asset total is exactly the same.

Before we close out our discussion of the  balance sheet I want to introduce to you the  concept of working capital.

Working capital is a key financial liquidity metric  which reflects a company's ability to do business  on an ongoing basis.

You need sufficient working capital to be able to  operate, to be able to buy raw materials, to be  able to pay your labor,

and do the things that you need to do.  We can  derive the amount of working capital by  subtracting current liabilities from

the current assets that are shown on the balance  sheet.

And if you recall the numbers for Dow, the  current assets were around $24 billion and the  current liabilities around 12, leaving them with

a working capital position of about $12 billion  which seems to be fairly comfortable for a  company the size of Dow.

This brings us to the end of this video on the  balance sheet. Hopefully you now have a better

understanding of what the balance sheet is and  what is contained in it.

If you want to learn about the other two major  financial statements, the income statement and  the cash flow statement, please visit the other

videos in this series. Once again this is Bob  Salvin and I'll be looking forward to having you  join me in those videos.