I used to think that when a business "made money" it was the same thing as earning revenue, as well as collecting cash. But then I realized I was wrong. Today we cover a basic accounting principle that's important for investment bankers to understand when looking at financial statements.

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When an asset gets written down in value, how does that impact the financial statements? What happens when debt gets written down too?

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What does it mean for capital to be "working"? Today we unpack this concept, which is plays an important role in understanding the balance sheet, cash flow, and projecting cash flows in a DCF model.

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Can Shareholder's Equity be negative on the balance sheet? And if so, how?

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What happens when a company sells a product, and how are the financial statements impacted? We'll assume the product is sold for $20 and it costs $10 make.

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What happens to the financial statements when a company buys a factory with debt? We'll look at this scenario at Year 0, Year 1, and the end of Year 2 / start of Year 3.

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How do you account for changes in the financial statements when inventory increases by $10?

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How does accrued compensation work on the financial statements? Today we'll work through a simple problem to find out.

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Let's put our knowledge of financial statements and depreciation to work to solve a simple investment banking accounting question.

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Depreciation and Amortization always seems like funny concepts to me, but now that I have studied them in more detail I understand why they exist.

Today we'll go over the basics of what D&A actually are and why they matter.

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