Balance Sheet

And then also how the income statement relates to the balance sheet.

like a balance sheet.

So that's my balance sheet.

Above this line right over here is the income statement, down here is the balance sheet.

What's included in the balance sheet?

We have a new balance sheet.

So this is my balance sheet.

Let me draw my balance sheet.

What is my new balance sheet?

And actually, in this video, we're going to see how the income statement relates to the balance sheet.

Let's say my initial balance sheet is

Notice, when I did this balance sheet

What is my before house balance sheet?

And income statements tell you how do you get from one balance sheet to the next balance sheet?

Or you could also view this balance sheet here as the balance sheet at the beginning of month 2.

Obviously, they don't have an identical balance sheet.

On all of these financial institutions' balance sheet.

Let me draw another series, another balance sheet.

liability side of the balance sheet as well.

For the liability side of my balance sheet

Instead of doing that, what you do is I'll put the balance sheet down here so whatever the balance sheet was in so I'll draw both hand sides of the balance sheet.

So if I just had a personal balance sheet,

On Bank B's balance sheet we're calling this a

And so on Bank C's balance sheet, it'll say

But it doesn't show up on your balance sheet.

This is kind of my whole personal balance sheet.

So now what does the balance sheet look like?

Or, how much can I expand my balance sheet?

at least from a balance sheet point of view.

So how much could I expand my balance sheet?

So what does my balance sheet look like now?

So now what does my balance sheet look like?

As you start putting all this into a spread sheet you actually start building the classic income statement balance sheet and cashflow we haven't even had you do yet.

So the way you can think about what an income statement is, is it tells you what happens between balance sheet snapshots.

I also have drawn the balance sheet at the end of month 1 and the balance sheet at the end of month 2.

And we'll learn later the cash flow statement essentially reconciles the income statement with what happens with your actual cash account, or how things actually move within the balance sheet.

It involves an expansion of the central bank's balance sheet.

Notes outstanding is the other side of the balance sheet.

This is just to explain what a balance sheet is.

It involves an expansion of the central bank's balance sheet.

Because the balance sheet is often called the company's books.

And this isn't the balance sheet just for my house.

And now my whole personal balance sheet, what just happened?

So this is the asset side of the balance sheet.