Balance Sheets, Block Chain, And More!

You should know the process by now!

What Is a Balance Sheet?

A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point in time, and provides a basis for computing rates of return and evaluating its capital structure. 

It is a financial statement that provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders.

The balance sheet is used alongside other important financial statements such as the income statement and statement of cash flows in conducting fundamental analysis or calculating financial ratios.

---What Is Capital Structure?

The capital structure is the particular combination of debt and equity used by a company to finance its overall operations and growth.

Equity capital arises from ownership shares in a company and claims to its future cash flows and profits. 

Debt comes in the form of bond issues or loans, while equity may come in the form of common stock, preferred stock, or retained earnings. 

Short-term debt is also considered to be part of the capital structure.

---What is Blockchain?

Blockchain seems complicated, and it definitely can be, but its core concept is really quite simple. A blockchain is a type of database. 

To be able to understand blockchain, it helps to first understand what a database actually is. 

A database is a collection of information that is stored electronically on a computer system. Information, or data, in databases is typically structured in table format to allow for easier searching and filtering for specific information. 

What is the difference between someone using a spreadsheet to store information rather than a database?

Spreadsheets are designed for one person, or a small group of people, to store and access limited amounts of information. 

In contrast, a database is designed to house significantly larger amounts of information that can be accessed, filtered, and manipulated quickly and easily by any number of users at once.

---What Is a Bond?

A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). 

A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. 

Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. 

Owners of bonds are debtholders, or creditors, of the issuer. 

Bond details include the end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments made by the borrower.

---What Is a Break-Even Analysis?

Break-even analysis entails calculating and examining the margin of safety for an entity based on the revenues collected and associated costs. 

In other words, the analysis shows how many sales it takes to pay for the cost of doing business. 

Analyzing different price levels relating to various levels of demand, the break-even analysis determines what level of sales are necessary to cover the company's total fixed costs. 

A demand-side analysis would give a seller significant insight into selling capabilities.

---What Is a Budget?

A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. 

Budgets can be made for a person, a group of people, a business, a government, or just about anything else that makes and spends money.

---What Is Budget Deficit?

A budget deficit occurs when expenses exceed revenue and indicate the financial health of a country. 

The government generally uses the term budget deficit when referring to spending rather than businesses or individuals. 

Accrued deficits form national debt.

---What Is a Budget Surplus?

A budget surplus occurs when income exceeds expenditures. 

The term often refers to a government's financial state, as individuals have "savings" rather than a "budget surplus." 

A surplus is an indication that a government's finances are being effectively managed.

What Is a Business Model?

The term business model refers to a company's plan for making a profit. 

It identifies the products or services the business plans to sell, its identified target market, and any anticipated expenses. 

Business models are important for both new and established businesses. 

They help new, developing companies attract investment, recruit talent, and motivate management and staff. 

Established businesses should regularly update their business plans or they'll fail to anticipate trends and challenges ahead. 

Business plans help investors evaluate companies that interest them.

---What Is Business-to-Consumer (B2C)?

The term business-to-consumer (B2C) refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services. 

Most companies that sell directly to consumers can be referred to as B2C companies.

B2C became immensely popular during the dotcom boom of the late 1990s when it was mainly used to refer to online retailers who sold products and services to consumers through the Internet.

As a business model, business-to-consumer differs significantly from the business-to-business model, which refers to commerce between two or more businesses.

---What Is a Business Valuation?

A business valuation is a general process of determining the economic value of a whole business or company unit. 

Business valuation can be used to determine the fair value of a business for a variety of reasons, including sale value, establishing partner ownership, taxation, and even divorce proceedings. 

Owners will often turn to professional business evaluators for an objective estimate of the value of the business.