Phil Company,Inc.

Understanding these terms

Plain-English explanations of each figure in the table above, and what a beginner typically looks at. These are educational descriptions only, not advice.

Total Assets

Everything the company owns — fixed assets, investments, cash, inventory, and receivables combined.How a beginner reads it: A beginner reads total assets to gauge the size of the business and, alongside profit, how efficiently those assets generate earnings.

Current Assets

Assets expected to turn into cash within a year — cash itself, receivables, and inventory.How a beginner reads it: A beginner compares current assets to current liabilities (the current ratio) to gauge whether the company can meet its near-term bills comfortably.

Current Liabilities

Obligations due within the next year — supplier dues, short-term loans, and similar.How a beginner reads it: A beginner reads these against current assets. Comfortably more current assets than current liabilities generally suggests fewer short-term liquidity worries.

Total Liabilities

Everything the company owes — borrowings plus all other obligations combined.How a beginner reads it: A beginner reads total liabilities against total assets to see how much of the company is financed by what it owes versus what shareholders own.

Retained Earnings

The cumulative profit a company has kept rather than paid as dividends, reinvested back into the business. The US counterpart of accumulated "Reserves".How a beginner reads it: A beginner reads rising retained earnings as profits compounding inside the company. A long history of growth here often reflects a consistently profitable business.

Borrowings

The total money the company owes to lenders — short-term and long-term loans and bonds.How a beginner reads it: A beginner reads borrowings next to reserves and operating profit to gauge how much debt the business carries and whether it can comfortably service it. Falling borrowings over time can indicate deleveraging.