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I disagree. A service can, on average, be sold for more money than what's stored in it.
by nawitus 13y ago
I disagree. A service can, on average, be sold for more money than what's stored in it.
- MichaelGG 13y agoOnly if the buyer is willing to commit fraud. If I've got a trading platform, and I'm holding $1M but I charge no fees, then my business is not generating any revenue or profit so it's worth very little. The $1M in "storage" is worth more if I steal it. That's why Wells Fargo has a market cap of $225BN but has assets over a trillion, right?
- jacques_chester 13y ago> That's why Wells Fargo has a market cap of $225BN but has assets over a trillion, right? Banks are in an unusual position. They have cash, but it's not theirs. Depending on the report and reporting rules, it might be reported as either an asset or a liability.
- smsm42 13y agoAssets are matched with liabilities. E.g. I may have an asset worth $1M - namely, my house (I don't, but a man can dream :). Now am I rich or not? It depends. If I owe nothing on the house, I'm in a pretty good shape. If I have a liability of $1.5M mortgage, I'm deeply in the red.
- Sniperfish 13y agoAssets are matched with liabilities + stockholder equity, not just liabilities. (Balance Sheet equation is Assets = Liabilities + Stockholder Equity)