Comments on: Balance Sheet Analysis: Circuit City

By: How to Analyze Receivables and Inventory

How to Analyze Receivables and Inventory — Thu, 11 Feb 2010 08:21:51 +0000

[...] by analyzing the inventory and accounts receivables. This has also been discussed in the balance sheet analysis. Sales, Inventory and Receivables [...]

By: Jae Jun

Jae Jun — Fri, 25 Dec 2009 18:04:50 +0000

Hey Ankit,

I think shorting is for only those that have guts and have the captial. I sure don’t want to be caught in a squeeze. Could end up losing everything even though I may be right.

I agree with you also on debt and dividends. I don’t like companies that continually distribute or raise dividends just because they have always done it. If they are in a difficult decision, the smart thing would be to pay debt rather than pay shareholders.

By: Ankit Gupta

Ankit Gupta — Thu, 24 Dec 2009 20:26:47 +0000

I thought I’d make 2 comments here:

1. Sometimes, analyzing balance sheets and finding bad things is good – you can always short a stock. So if you find a company that makes designer jeans that sell for $300+/pair, and they’re out of fashion, yet their inventory is piled high, there might be a good shorting opportunity if the clothes don’t move at the price they expect them to.

2. On the topic of debt – maybe I’m just very picky, but when a company has debt and is issuing dividends to stock holders, that’s a situation I don’t like. Opportunity cost says you could have paid down the debt before issuing a dividend, and so you’re essentially taking out debt to issue dividends, which doesn’t make sense. This unfortunately rules out a lot of companies for me, but I just don’t like it.

By: Best 15 Investing Metrics and Ratios List | Old School Value

Best 15 Investing Metrics and Ratios List | Old School Value — Tue, 22 Dec 2009 08:25:24 +0000

[...] value analysis to date. No one can beat Benjamin Graham when it comes to asset based valuation and balance sheet analysis. 3. Free Cash Flow (FCF) [...]

By: Working capital in Free Cash Flow FCF Caluation

Working capital in Free Cash Flow FCF Caluation — Fri, 27 Nov 2009 08:07:15 +0000

[...] we look at the assets of the balance sheet, accounts receivables is listed under assets but when you start thinking about working capital it [...]

By: OSV Portfolio Performance Oct 2009

OSV Portfolio Performance Oct 2009 — Thu, 05 Nov 2009 16:20:31 +0000

[...] to add a little more, I’ll stick it out for a little longer until I get some new info on the balance sheet and cash flow statement and what the company plans to do with the cash when the quarterly results [...]

By: Thorton L. O’Glove’s ‘Quality of Earnings’ Provides Timeless Advice for Value Investors | Reaction Radio

Wed, 14 Oct 2009 11:02:56 +0000

[...] tend to perform balance sheet analysis and cash flow statement analysis much deeper than the income statement. I would guess that you do [...]

By: Investing Book Review: Quality of Earnings | Old School Value

Investing Book Review: Quality of Earnings | Old School Value — Wed, 14 Oct 2009 05:18:37 +0000

[...] tend to perform balance sheet analysis and cash flow statement analysis much deeper than the income statement. I would guess that you do [...]

By: Jae Jun

Jae Jun — Thu, 19 Feb 2009 17:20:14 +0000

Thank you Phil B. There are plenty of other things to look for but hopefully I’ve covered the important aspects to help others in getting started analyzing the financial statements.

By: Phil B.

Phil B. — Thu, 19 Feb 2009 15:31:21 +0000

I think in a short amount of space you highlighted key issues affecting CC and what to look for. In my finance class I teach I use Best Buy and Circuit City financials to show good and bad examples when comparing like companies on the income statements, balance sheets and statement of cash flows. CC death warrant starting being written as far back as early 2007 before the crisis even hit and we have been talking about it filing for bankruptcy since the beginning of 2008. It is amazing how often the warning signs creep in well before the company disappears. nice summary analysis here and good example to show students.