We Study Billionaires - The Investor’s Podcast Network TIP752: Financial Statements Explained Simply w/ Brian Feroldi
235 snips
Sep 12, 2025 
Brian Feroldi, founder of Long-Term Mindset, shares his expertise in analyzing financial statements. He discusses the critical components of the balance sheet, income statement, and cash flow statement, emphasizing the need for accurate accounting practices. Feroldi explains why cash compensation is preferable to stock options and highlights the pitfalls of relying on the P/E ratio for growth businesses. He also details red flags in financial statements that investors should watch for, and how ethical management plays a key role in accurate financial reporting.
AI Snips
Chapters
Transcript
Episode notes
Financial Statements Are The Company Report Card
- Financial statements are a company's report card to judge execution against its promise.
- Brian never invests without deeply analyzing a company's financial statements.
Master Accounting Equation Defines Net Worth
- The master accounting equation: assets = liabilities + shareholders' equity defines net worth.
- It underpins the balance sheet and keeps all accounting in balance.
Use All Three Financial Statements Together
- Learn the three statements: balance sheet, income statement, and cash flow statement.
- Use them together to get a full picture of a company's financial health.