PATRIMÔNIO E PATRIMÔNIO LÍQUIDO - CONTABILIDADE - BALANÇO PATRIMONIAL (Situação Líquida)

You have surely seen someone with a fancy car, a car, several luxury goods, and thought that person is rich. They have enormous wealth. Or perhaps you passed by a large company, imposing, with a fancy building, and thought how vast the company's wealth is.

So, in this video, you will learn a lesson that possessions do not represent wealth. In this video, you will learn the difference between assets and net worth, a concept that comes from accounting and applies to your life as well. The easiest way to explain why possessions are not wealth is with the following example: Imagine you bought a car for $100,000, but you paid only $10,000 for it and financed the rest over ten years.

At this moment, when you have possession of your fancy car, those who see you and that material possession do not see how it is being paid for. If the installment bills were attached to the car, the impression that the fancy car gives would not be the same, right? So now comes the important lesson of this video: Assets are everything you have.

In our example, the car is worth $100,000. But to find the net worth, you need to subtract all that you have in terms of debts, that is, obligations, what you have to pay in the future. Therefore, in our example, your net worth is $10,000, as you have a car worth $100,000 and a debt of $90,000.

Accounting-wise, assets are the combination of goods, rights, and obligations of an entity, meaning it applies to individuals and legal entities, the goods and rights. In accounting, we call them assets and obligations. For example, what I have to pay we call liabilities.

Net worth is the difference between assets and liabilities. Hence comes the famous accounting equation used to balance financial statements. Assets equal liabilities plus net worth.

But instead of memorizing this formula to balance statements, think a bit and try to understand what it means. This formula tells us that everything you have, that is, what you have, that is, your assets, are financed and paid for in some way, either with debts, or with your own money. Therefore, the portion of your assets that you don't have to pay to anyone, it's yours, it's your net worth.

That's where your wealth is. Now let's put the learned concepts into practice and help our friend calculate João's net worth. Analyzing João's assets, we can see that he has an imported car worth 100,000 R$, an apartment worth 150,000 R$, a country house worth 180,000 R$, he also has 7,000 R$ in the bank and 500 R$ in his pocket.

These are João's assets and rights. Now, taking a look at his obligations, we can see that the currency exchange, the apartment are financed and he has 250,000 R$ to pay in bank loans. He has 200,000 and only 15,000 R$ in credit card debt to pay.

He has 200,000 and only 15,000 R$ in credit card debt to pay. So, what we are going to do now is to compare João's assets with his obligations. On the left side, here are all the assets that add up to 437,500 R$ and his obligations add up to 465,000 R$.

Calculating the net worth, which is the difference on the left side, which is the asset with the right side of the obligations, which is the liability. We find that João has a negative net worth of 27,500 R$ and that's not good, even with considerable assets, you can see that he is not accumulating wealth. Net worth is the efficient measure of true wealth.

Net worth can be large, but if liabilities, the debts, exceed assets, the situation is terrible. This situation where the total of his liabilities is greater than the sum of his assets in accounting we call it negative equity. It is the situation where net worth is negative.

This situation is critical, but reversible. To regain positive net worth and net worth, he must pay off his debts with his earnings and accumulate, that is, save money so that his capital can grow. All this analogy we made with your income and accumulate, that is, save money so that, then, your capital can grow.

All this analogy that we made with an individual also applies to companies and you will find the company's assets and shareholders' equity in the financial statement called balance sheet. It is one of the most important ones, as it allows interested parties in the company to ascertain the company's assets and the net worth that the company is accumulating. You usually learn about the balance sheet when studying basic accounting.

If you are studying accounting and are not yet familiar with the balance sheet, or if you need help with basic accounting, I invite you to check out our Animated Accounting course where I will explain to you all the initial topics of accounting in an animated way with over 100 solved exercises. The link is in the description of this video. Going back to the theme of the video, understanding the difference between what is assets and what is shareholders' equity is something basic in accounting, which is essential for you to record transactions and interpret what the balance sheet presents to you.

So, understand that assets are the set of assets, rights and liabilities of an entity. On the other hand, shareholders' equity, I subtract the liabilities from the assets and rights and see what remains. It is the net worth of that entity.

In the balance sheet, you understand shareholders' equity as the company's own capital. Liabilities, on the other hand, debts, we call third-party capital. The most basic analysis you can do, considering this information, is to calculate the company's financial leverage, look at the right side of the balance sheet and ask yourself what percentage of my assets is financed by third parties and what I don't owe to anyone.

What is the own capital? What is shareholders' equity? Check the historical shareholders' equity of the company and see if it is growing or decreasing.

If it is growing, it means that the company is generating wealth, generating profit which over time will accumulate within the shareholders' equity, and can be distributed in the form of dividends to its shareholders. within the shareholders' equity, which can be distributed in the form of dividends to its shareholders. Now, if this shareholders' equity is decreasing over time, it can be a strong indication that the company is experiencing losses and that is depleting its net worth.

Make sure to check out this video that presents the relationship between the balance sheet and the statement of income. And you will understand how profits are accumulating within the shareholders' equity. I hope this video has helped you.

In the following, there will be other videos that can enhance your analysis and your understanding of accounting around here. I thank you for watching this video and see you in the next one. Take care for everyone.