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October 4, 2002 - ICLUBcentral News

ICLUBcentral News October 4, 2002


New Official NAIC Software Teaches Stock Picking and Portfolio Management

At NAIC's recent National Congress in Portland, OR, we unveiled NAIC's newest official investing software, NAIC Classic Plus.

NAIC Classic Plus is specially designed to teach NAIC's investing methodologies for picking stocks and managing your portfolio. And now you can import current company data with a single click via NAIC’s new Online Premium Services (OPS) datafile service. (See below for directions on loading a company from OPS data.)

NAIC Classic Plus teaches you to invest the NAIC way by walking you step-by-step through NAIC’s forms for stock study and portfolio management. (NAIC Classic Plus includes all of NAIC's most popular stock analysis and portfolio management forms—SSG, SCG, SCL, PMG, PERT, and more. See for details.) It even offers feedback to help you learn! As you gain experience, you can use the experienced user mode to dive right into detailed analysis.

Best of all, NAIC Classic Plus is just $69 for NAIC members! To get your copy today, please call NAIC toll-free at 1-877-ASK-NAIC (877-275-6242), ext 0, or do it online at

Special Series (Part I): Introduction to the Balance Sheet
By Jeff Halaka, CFA, CPA

What is a balance sheet? What can one learn about a company from its balance sheet? This first article will review and examine the balance sheet on a standalone basis. Subsequent articles will evaluate a company by analyzing its balance sheet, income statement, and cash flow statement in aggregate. Much of what we can learn about a company can come from analyzing these reports in combination.

The balance sheet is a snapshot of corporate resources and obligations at a given point in time. In the United States, companies issue balance sheets at the end of each quarter (10Q) and at the end of their fiscal year (10K). Outside of the US, annual and semiannual reporting is the general rule. The balance sheet reports a company’s assets, liabilities, and stockholder equity. Assets are the firm’s resources—cash, inventories, equipment, and the like. Liabilities are the firm’s obligations, such as accounts payable, accruals, and debt. Stockholders’ equity consists of owners’ contributed capital and owners’ retained profits not paid out as dividends.

Balance sheet accounts are ongoing for the lifetime of a company. The balance sheet is like your checkbook balance that you look at each month to see where you stand. It changes each month depending on activity and can be reconciled from one month to the next. A balance sheet can tell you if a company has enough money to continue to fund its own growth or whether it is going to have to take on debt, issue debt, or issue more stock in order to keep on going.

The fundamental accounting equation that supports the Balance Sheet is:

Assets = Liabilities + Stockholders’ Equity

This equation is the foundation for recording transactions. The equation must always be in balance. If one buys inventory for cash, then inventory (which is an asset) increases and cash (also an asset) decreases. After recording the accounting entry, the equation still remains in balance. If a company borrows cash, the asset side of the equation increases, as does the liability side. For now, we will explore balance sheet-only accounting entries. In future articles, we will learn how to record entries that impact both the balance sheet and the income statement.

Balance sheets provide an overview of a company’s financial position. Examples of what it can show are:

  • Company Leverage – A comparison of company debt to equity. When applying the fundamental accounting equation, assets are funded with either debt or equity.
  • Tangible assets compared to Intangible assets – Tangible assets are cash, accounts receivable, inventory, property, and equipment. Intangible assets consist of non-physical resources such as customer lists, goodwill, and patents. Tangible assets tend to be much more liquid than intangibles.
  • Company Solvency – The ability for a company to meet future debt obligations. An investor or analyst can look into the footnotes of the financial report to gather maturity dates on debt facilities. To assess solvency, one should compare the liquidity of assets with the maturation of company liabilities. Liquidity is defined as the company’s ability to convert assets into cash. Accounts receivable that are collectible 30 days hence are much more liquid that a piece of land that might take a company several months to sell.

Essential Takeaways

  1. The Balance Sheet is a snapshot in time. Accounts are ongoing, not reset at the beginning of year.
  2. Assets = Liabilities + Stockholders’ Equity

Jeffrey A. Hakala, CFA, CPA is a professional portfolio manager and security analyst with Seger-Elvekrog Inc. The author can be reached via e-mail at His firm’s website is

Find red flags first with Stock Analyst Plus
NAIC's most powerful analytical software, Stock Analyst Plus is the only NAIC Software that enables in-depth balance sheet analysis.

Order for $99 at 1-877-275-6242, ext 0, or online at  More information & demo copies available at  

Importing OPS data into NAIC Classic Plus
By Barbara DalMaso, ICLUBcentral Inc.

Loading company data is a breeze with NAIC’s brand-new NAIC Classic Plus investing software and Online Premium Service (OPS) datafiles. (A subscription to OPS is included with individual and lifetime NAIC memberships, and is just $25 for active NAIC club or youth members. For more details, please visit the NAIC web site at

Once you have gotten access to OPS, you’ll need to save your OPS access information in NAIC Classic Plus. Do this from the menu line: click ‘Options’ and ‘Preferences’. At the bottom of the "General’ tab fill in the cells marked ‘E-mail Address’ and ‘Password’ with the data you registered at the NAIC web site. Now your program is set to receive OPS data!

Beginners will find it easy to load a new company from the Main Page:

  1. Select the NAIC report you wish to study—SSG, SCG, PERT, PMG, etc.
  2. ‘Where’s the data for the company?’ Select the last choice: ‘Download from NAIC Online (OPS) Datafiles’.
  3. Click ‘Start’.

Now you will see the ‘Open Company’ window showing the ‘Import NAIC OPS Datafiles’ tab. If all the cells are blank, click the ‘Get Current Index’ button to retrieve and show the listing for all the datafiles offered. This will take 2-3 seconds. There will be over 7,000 companies listed in alphabetical order.

You may select a company from the list in various ways. Type in the company’s ticker symbol or name and then click OK. Otherwise you may double-click on the company name or else highlight the name and click the ‘OK’ button. The company will automatically be loaded for immediate study.

If you wish to sort all the companies by industry, click the industry list header. This will list the companies by industry alphabetically.

For better viewing, you may change the size of any header by dragging the title bar horizontally. You may also enlarge the ‘Open Company’ window by dragging from a corner or an edge. This allows you to view more of the listed companies at one time.

An alternative way to load companies—equally simple—is to use the menu line function ‘File>Open’ and select the ‘Import NAIC OPS tab’.

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