#balance-sheet
Balance sheet preparation, analysis, and understanding assets, liabilities, and equity
Applied Materials posted record Q3 FY2026 revenue of $9.12 billion (+25% YoY), a 50.3% GAAP gross margin, and net income of $2.54 billion (+43%). A double-entry read of the balance-sheet lines that lead the AI equipment cycle — inventory at $6.56 billion and contract liabilities at $3.27 billion, both rising together.
Broadcom's Q3 FY2026 revenue hit $29.591 billion (+86% YoY) and GAAP net income $13.088 billion (+216%), with AI semiconductor revenue of $16.7 billion now 56% of total revenue. A double-entry breakdown of how the AI backlog shows up as $13.7 billion of receivables and $4.5 billion of inventory while free cash flow ran at 46% of revenue.
GameStop earned $298.7 million of net income on $790.2 million of net sales in FY2026 Q2 — a record $160.2 million of second-quarter operating income, with the rest driven by a $4.9 billion eBay stake and $5.4 billion of cash, marketable securities, and digital assets, reconciled line by line in a public Beancount ledger.
Marvell's Q2 FY2027 (ended August 1, 2026) posted record revenue of $2.739B (+37% YoY) and data-center revenue of $2.172B (+46%), yet GAAP net income of $308M was barely a third of the $866M non-GAAP figure. The $558M gap — $326M stock-based compensation plus $215M acquired-intangible amortization — is reconciled line by line in a public Beancount ledger.
Palo Alto Networks closed FY2026 with Q4 revenue of $3.41 billion (+34%), NGS ARR of $9.10 billion (+63%), and $21.2 billion of remaining performance obligations, while the CyberArk acquisition lifted goodwill from $4.57 billion to $22.01 billion. A double-entry read of the 10-K's purchase-price allocation, the $14.76 billion deferred-revenue stock, and why GAAP operating margin fell to 6.1%.
Salesforce FY2027 Q2: $11.3B revenue (+11%) with a stated $456M Informatica contribution, GAAP diluted EPS $4.29 (+119%) driven by $2.6B of strategic-investment gains over flat $2.33B operating income, and a $25B accelerated share repurchase that cut stockholders' equity by $20.8B — tracked in a public Beancount ledger asserting goodwill at $59.3B and treasury stock at $55.0B.
Synopsys posted $2.477B revenue for Q3 FY2026 (+42% YoY) with GAAP diluted EPS of $2.84 against non-GAAP $3.91 — a gap bridged mostly by $402M of acquired-intangible amortization from the Ansys deal. A public Beancount ledger reconciles the print to the balance sheet, where goodwill sits at $26.8B and long-term debt is already down from $13.5B to $9.0B.
The quick ratio (acid-test ratio) measures whether a business can cover current liabilities using only cash, marketable securities, and receivables — deliberately excluding inventory and prepaid expenses. Covers the formula with a worked example, why loan covenants often set a quick-ratio minimum instead of a current-ratio one, why 1.0 is the textbook benchmark but fast-turn retailers healthily run 0.3–0.4, and the mistakes that make the ratio misleading.
The asset coverage ratio measures whether tangible assets could repay total debt in a liquidation — [(total assets − intangibles) − (current liabilities − short-term debt)] ÷ total debt. Below 1.0 is a red flag, 2.0 is a common healthy benchmark, and lenders often write a minimum ACR into loan covenants that can trigger technical default.
FASB's ASU 2025-12 (Issue 16) amends ASC 825-10-25-4(e) to bar electing the fair value option for an equity method investment after recognizing an other-than-temporary impairment — restoring a guardrail accidentally deleted by ASU 2016-13's CECL conforming amendments. Effective for annual periods beginning after December 15, 2026, with early adoption permitted and prospective or retrospective transition decided issue by issue.
FASB's ASU 2025-06 replaces the three-stage ASC 350-40 test with a single "probable-to-complete" threshold for internal-use software, a change expected to decrease capitalization for SaaS companies once it takes effect for annual periods beginning after December 15, 2027.
Common-size analysis restates every line of a financial statement as a percentage of revenue or total assets; trend analysis indexes the same lines across years. Together they expose cost creep, margin erosion, and balance sheet drift that raw dollars hide, and they make a $2M business meaningfully comparable to a $50M peer.
