More debt than cash as a red flag eliminates 99% of the companies out there. There are many great companies with far more debt than cash. As for intangibles, success in some industries is based on strong intangibles (patents, brands etc). This is far too simplistic.
Looking at the channel quickly seems super not credible, idk if it’s golf course & RUclips educated people plugging things into chat GPT or what but it ain’t high quality advice
Some businesses/industries require high debt loads to operate efficiently, which is why any college professor that knew what they were talking about wouldn’t teach this.
Can you elaborate further how is the first "red flag" a red flag? Isn't the point of having debt is to use the borrowed cash to buy cashflow generating assets? So, wouldn't it be normal to have more debt than cash?
Good content. Regarding the small Goodwill drop example from 2022 to 2023, note that it’s required that the Goodwill be amortised over 40 year period. Therefore it will naturally be on gradual decline every year without new acquisitions. In this case it’s not an irregular“write off”.
How can a CFO manage to solve this kind of problems? I’m interested in knowing the investor decision making (which you have already explained) and the company’s strategy for solving this issues.
Yep, very amateur. The part on cash to debt this guy is looking at capital intensive fixed asset businesses in regulated industries that produce high and sustainable free cash flow margins. He should’ve at a minimum found better examples of low cash to debt companies.
@@timmythomas3522 I watched former hedge fund manager Hugh hendry rip this dude a couple of years ago and I thought Hugh was out of line. Hugh called this type of information dangerous to people’s net worth. After watching this though I agree with Hugh. Attacking a company’s balance sheet when they pay out billions in dividends every year and increase said dividends every year is bad financial education.
@@timmythomas3522he would need a lot more than that. The most innovative and valuable companies have a lot more than 50% of their assets as intangible as protected IP is an intangible asset. In this case he listed VzW whose spectrum licenses are intangible assets, but are actually quite liquid. Putting out quick hit bad info like this is bad for the uneducated viewers networth.
How does one know if the numbers on a balance sheet are credible? It seems every video on investing is aimed at those with 30,40 or 50 years as a potential future. Sure, I get that. Time is your friend at those ages. However, why doesn't someone do a few presentations for those who may be over 65 or 75 and struggling with just keeping ahead of inflation?
when looking at assets and liabilities, how did you decide to exclude certain items? arent marketable securities and accounts receivable 'money in the bank'? and similarly for liabilities? why not use total assets and total libilities?
Don't know if the Finchat numbers you're showing are current, but CMCSA 's quick and current ratios as of today are 0.66, according to Finviz, which isn't great, but a lot better than the asset/debt ratios on the chart shown in the video.
Sounds like America's balance sheet
Sad, but true....
If an entity has fixed assets on their balance sheet that produce sustainable cash flows, they should have high debt loads relative to cash.
Spot on.
It's even worse. The economy is running on toilet paper. The brics are about to expose that giant ponzy scheme
Deceptive. You shouldn’t have a picture of Bill Ackman on the video. This undermines your credibility. Which is too bad because your content is good.
Misleading thumbnails are a red flag for RUclips channels.
More debt than cash as a red flag eliminates 99% of the companies out there. There are many great companies with far more debt than cash. As for intangibles, success in some industries is based on strong intangibles (patents, brands etc). This is far too simplistic.
Looking at the channel quickly seems super not credible, idk if it’s golf course & RUclips educated people plugging things into chat GPT or what but it ain’t high quality advice
Please make a video about all types of ratios required for investing in a company. Like PE ratio.
I think you'll enjoy next Saturday's video
@@BrianFeroldiYT ahh let's go
Do it yourself
College professor never taught this. Thanks.
:)
Some businesses/industries require high debt loads to operate efficiently, which is why any college professor that knew what they were talking about wouldn’t teach this.
Can you elaborate further how is the first "red flag" a red flag? Isn't the point of having debt is to use the borrowed cash to buy cashflow generating assets? So, wouldn't it be normal to have more debt than cash?
Good content. Regarding the small Goodwill drop example from 2022 to 2023, note that it’s required that the Goodwill be amortised over 40 year period. Therefore it will naturally be on gradual decline every year without new acquisitions. In this case it’s not an irregular“write off”.
Thanks -- but goodwill is not amortized. Its only periodically tested for impairment.
Best accounting teacher
Thanks!
Excellent and honest video..
Thank you 🙂
The biggest red flag is a recommendation by Ackman
lol
Thank you for this information.
Glad it was helpful!
Your video is the best amongst several classes I took about reading financial statements 👍
Wow, thank you!
Great job sir! I have a 4 yr degree in finance and accounting, and spent 7 years in the banking industry. Very well done on your part!
Wow, thank you!
How can a CFO manage to solve this kind of problems? I’m interested in knowing the investor decision making (which you have already explained) and the company’s strategy for solving this issues.
Balance Sheets are in a company's control, the same way that a person's net worth is in their control. It's just a matter of making it a priority.
appreciate the info! (is it just me or is the audio out of sync w/ lip movement?)
Thanks for the feedback
What the name of the tool you are using to compare different years ?
Finchat.io/brian
Thanks for the Video. What kind of software do you show in your footage?
Do you mean to edit the video?
@@BrianFeroldiYT No, I mean the software for the stock charts.
@@Caddi-Geldanlage FinChat
Anytime I see anything in the expense account I grow angry.
don't agree with all of this but a good primer
Yep, very amateur. The part on cash to debt this guy is looking at capital intensive fixed asset businesses in regulated industries that produce high and sustainable free cash flow margins. He should’ve at a minimum found better examples of low cash to debt companies.
@@cyberft agreed, but I appreciate the content in general. A caveat on too much cash would have straightened that out.
@@timmythomas3522 I watched former hedge fund manager Hugh hendry rip this dude a couple of years ago and I thought Hugh was out of line. Hugh called this type of information dangerous to people’s net worth. After watching this though I agree with Hugh. Attacking a company’s balance sheet when they pay out billions in dividends every year and increase said dividends every year is bad financial education.
@@timmythomas3522he would need a lot more than that. The most innovative and valuable companies have a lot more than 50% of their assets as intangible as protected IP is an intangible asset. In this case he listed VzW whose spectrum licenses are intangible assets, but are actually quite liquid. Putting out quick hit bad info like this is bad for the uneducated viewers networth.
How does one know if the numbers on a balance sheet are credible?
It seems every video on investing is aimed at those with 30,40 or 50 years as a potential future. Sure, I get that. Time is your friend at those ages.
However, why doesn't someone do a few presentations for those who may be over 65 or 75 and struggling with just keeping ahead of inflation?
Good idea
Awhile ago I watched Hugh Hendry rip this guy, and I thought Hugh was being unfair. After this though.
⚠️⚠️⚠️Goodwill should be under liabilities, 🚫 not assets
It would work better like that, justify Firing Staff for one thing.. more is yet to come🕴️
Agreee….but then the balance sheet wouldn’t balance
when looking at assets and liabilities, how did you decide to exclude certain items? arent marketable securities and accounts receivable 'money in the bank'? and similarly for liabilities? why not use total assets and total libilities?
I included marketable securities. Excluded A/R. A/R is not money in the bank because there is always a risk of not collecting it
Why does he look like one of the Wilson brothers.
for the first one, why wouldn't accounts payable count as debt?
It is kind of like debt in a way….but It doesn’t have an interest expense. It’s more of just a short-term obligation.
@@BrianFeroldiYT ahh interest-ing distinction!
Don't know if the Finchat numbers you're showing are current, but CMCSA 's quick and current ratios as of today are 0.66, according to Finviz, which isn't great, but a lot better than the asset/debt ratios on the chart shown in the video.
Hmm...yes, I used finchat's most recent numbers
@@BrianFeroldiYT Shouldn't the current and quick ratios more closely reflect the ratio shown on the chart, or do they measure something else?
Thumbs up
Cheers!
Lmao 20 years of “experience” and an amature level of business understanding