Financial Statement Models

What this video covers

• The balance sheet identity: Assets equals Liabilities plus Stockholders' Equity, and why equity is the residual claim (net worth / book value)
• Every balance sheet component from current assets through stockholders' equity, and the exam trap around what PP&E actually stands for
• The income statement waterfall from revenue down to net income, including COGS, SG&A, and where operating income (EBIT) sits
• Why depreciation, amortization, and depletion (D&A) are non-cash expenses that reduce net income but do not reduce cash today
• The three sections of the cash flow statement (CFO, CFI, CFF) and the formula that ties them to the change in cash for the period
• How net income flows to three places simultaneously: bottom of the income statement, start of CFO, and addition to retained earnings
• The model tie-out check: ending cash on the balance sheet equals beginning cash plus total change in cash from the cash flow statement