Category Archive for: Income and Changes Retained Earnings

Cash Effects

Transactions between the corporation and lts owners that inCrease or decrease cash are presented in the statement of cash flows as financing activities. Examples are the saleand repurchase of stock and the payment of cash dividends. Stock dividends and stock splits, on the other hand,’ are Important transactions that affect the company’s stockholders! equity, but…

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Distinction Between Stock

 Splits and Large Stock Dlyldends What is the difference between a 2-for-l stock split and a 100% stock dividend? There is very little difference; both will double the number of outstanding shares without changing total stockholders’ equity, and both should serve to cut the market price of the stock approximately in half. The stock” dividend,…

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Stock Dividends

Stock dividend is a term used to describe a distribution of additional shares of stock to Q company’s stockholders in preportionto their present holdings. In brief, the dividend is payable in additional shares ()f stock rather than in cash. Most stock dividends consist of additional shares of common stock distributed to holders of common stock, .and…

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OTHER TRANSACTIONS AFFECTING RETAINED EARNINGS

Cash Dividends Investors buy stock in a corporation in the hope of getting their original investment back with a reasonable return on that investment. The return on a stock investment is a combination of two forms: (1) the increase in value of the stock (stock appreciation) and (2) cash dividends. Many profitable corporations do not…

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Dividends in Arrears

Even when there are dividends in arrears, only the current year’s cumulative preferred stock dividend is deducted in the earnings per share computation. from previous years have already been deducted in the prior years’ earnings per share’ computations. Presentation of ‘Earnings per Share ln the Income Statement A publicly owned corporations’ are required to present earnings…

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Earning per Sharo (EPS)

One of the most widely “Kedcounselling stylistics is earning per shore of common stock, Everyone who buys 01 Mock in a corporation needs t know tho annul earnings per share, Stock market pill arc quoted on u per-share basis, It’ you sure considering nestling in IBM stock at 1 price of 5100 per share, you…

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Exlraordinary Items

The second category of irregular events requiring disclosure a separate see lion of the income statement is extraordinary items. An extraordinary item is a gain or loss that is .(I) unusual in nature and (2) //01 expected to recur in the foreseeable future. By definition, extraordinary items are rare and do not appear often in…

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REPORTING THE RESULTS OF OPERATIONS

The most important aspect of corporate financial reporting. in the view of most investors. is the determination of periodic income. Both the market price. of common stock and the amount of cash  per share depend on the current and future earnings of the corporation. Developing Predictive Information Revenues are measures of the value of products…

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WENT OUI SLOW BUT STEADY

.A statistical anomaly or sign of things to come? Busness Week’s flash earnings report-an early sampling of fourth quarter results from 80 companies reporting through Jan. 21 ame out flat. Revenues rose 6%, while earnings held steadV, VS. 8,47% jump in flash profits a year earlier. Results are skewed by some large enenme losses: Unlsys…

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