Embedded Files
Module 4:
Module 4:
A Preliminary Assessment of the Investigated Company's Capital
A Preliminary Assessment of the Investigated Company's Capital
In this module, we shift our focus from the left side of the balance sheet to the right side. Instead of looking at what a company owns, we will examine how it pays for its operations.
We will analyze the balance between equity—the owners' own money that provides financial security—and liabilities, which is borrowed money, or debt.
Next, we will combine this information with your asset data from Module 3. This will allow you to measure the company's financial independence, understand its approach to risk, and check its long-term stability using the Golden and Silver Rules of Financing.
STEP 0:
STEP 0:
5-Minute Classroom recap from Module 3
5-Minute Classroom recap from Module 3
🎮 1. CD PROJEKT – Code & Cash
What to remember: A game studio has no factories, yet 50% of its assets are long-term. Under the accounting standards (IAS 38), programmer salaries and ohter expenditures for future games (The Witcher 4, Cyberpunk 2) are saved on the Balance Sheet as Development Projects (PLN 1.15B / 33% of assets). The other big piece is simply Cash in the bank (PLN 1.32B / 38%).
🏭 2. ORLEN – Heavy Steel & Concrete
What to remember: This is a classic heavy industrial Balance Sheet, with 70% long-term assets. Physical refineries, pipelines, power grids, and fuel stations make up 54% of everything ORLEN owns (PLN 142.4B). To maintain these assets and build offshore wind, ORLEN reinvests PLN 33B into CAPEX in a single year.
🛒 3. Biedronka (Jerónimo Martins) – Rented Stores as Assets
What to remember: Biedronka rents most of its 6,500+ stores, yet it still shows 67% long-term assets. That is because IFRS 16 requires long-term rental contracts to be put directly on the Balance Sheet as Right-of-Use assets (EUR 4.0B / 26% of assets), right next to physical store equipment (EUR 6.1B / 41%).
🌐 4. Amazon – The "Upside-Down" US Balance Sheet
What to remember: When reading a US GAAP Balance Sheet, watch out for two things. First, it is printed upside-down, starting at the top with Cash (USD 86.8B). Second, there is no subtotal for long-term assets—you have to calculate it yourself to see that 72% of Amazon's assets (USD 589B) are long-term, led by AI data centers and warehouses (USD 357B).
✨ 5. Puig Brands – Bought Luxury Brands
What to remember: Puig owns only 7 factories (less than 6% of its assets), yet 70% of its Balance Sheet is long-term. That is because Puig grew by buying famous luxury brands (Charlotte Tilbury, Byredo, Rabanne). Under IFRS 3 and IAS 38, the billions paid for those brand names sit on the Balance Sheet as Goodwill and Intangibles (EUR 4.5B / 53% of all assets).
STEP 1:
STEP 1:
Introduction to Module 4
Introduction to Module 4
Now let's put these concepts into practice using two core analytical tools on the right-hand side of the Balance Sheet. First, through Vertical and Horizontal Capital Analysis, you will measure the exact percentage split of the financing mix -- including Permanent Capital -- and track how a company's equity and debt evolve over time. Second, we will apply the Golden and Silver Rules of Financing -- the classic 1:1 and 1:2 benchmark formulas that test whether Shareholders' Equity provides a safe cushion against Total Debt or if the company is overly reliant on external creditors.
STEP 2: GUIDED TEAM EXERCISE:
STEP 2: GUIDED TEAM EXERCISE:
5-GROUP FINANCIAL STATEMENT LABS
5-GROUP FINANCIAL STATEMENT LABS
STEP 3: Team Results Summary
STEP 3: Team Results Summary
In this section, we bring together the results from all five teams to compare our companies side by side. We will look at the key differences in their capital structures, check which companies pass the Golden and Silver Rules, and discuss the main takeaways. Go to summary!
STEP 4: STRATEGIC GROUP CASE STUDY
STEP 4: STRATEGIC GROUP CASE STUDY
Objective & Overview: Acting as the Management Board, teams must safely fund a PLN 1 billion AI and green transformation without triggering a liquidity crisis. By rating four financing paths—from short-term credit to Green Bonds and 50/50 Joint Ventures—you will test the Silver Rule in practice and learn to avoid fatal debt traps. Go to case study!
STEP 5: Module 4 Recap
STEP 5: Module 4 Recap
Classroom Debrief: What Each Team Teaches the Whole Group (Module 4)
Classroom Debrief: What Each Team Teaches the Whole Group (Module 4)
In Module 3, all five companies had a very similar asset structure, but in Module 4 we see that they fund those assets in three completely different ways depending on their industry.
We have three clear models here. CD PROJEKT uses 94% Equity and zero debt because making games is risky. ORLEN, Amazon, and Puig mix 50% Equity with long-term debt to pass the Silver Rule and build their factories and servers. And Biedronka has only 21% Equity, breaking both rules—yet it stays safe thanks to store leases and free credit from food suppliers.
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