This chapter explores the critical role of liquidity in finance, comparing it to oxygen, particularly during challenging times. It provides an in-depth examination of cash flow statements, the cash conversion cycle, and the nuances of financial metrics in assessing company performance, especially for young firms. Additionally, it discusses the complexities of accounting for operating leases and their implications on financial statements, highlighting potential red flags and the need for careful analysis.
“If you thought we were in the weeds, now we’re about to start tunneling.”
Jim Gillies joins Ricky Mulvey for an in-depth look at how investors can understand a company’s balance sheet. And a heads up, this show gets to some more advanced concepts than our usual fare. They discuss:
- The basics of balance sheets.
- If lululemon has an inventory problem.
- A cautionary tale from a mattress seller.
- Companies with strong balance sheets, (besides Berkshire Hathaway).
Companies discussed: OTC: KSIOF, WING, LULU, SNBR, CATO, CHGG, EBAY, COST, SFM, ASO, MEDP, WINA
Host: Ricky Mulvey
Guest: Jim Gillies
Engineer: Tim Sparks
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