In this section, we will look at basic concepts of the finance domain. We will start off by looking at how financial statements are formed. We will also understand the theoretical part of how to optimize capital structure.
Financial statements
Financial statements are used for the health report of a company. A financial report is part of an annual report for the listed company and is the basis of reading the financial health of a company.
Bankers recommend financial products from the results provided in this report, while investors make decisions by referencing this report for investment decisions. With regard to financial statements, there are two major types:
- Balance sheet: This is about the overall net worth. It details the total investment (assets), what we owe to the other as debt (for example, credit card and mortgage, liability, and so on), and the net of the investment-less liability, that...
