Stockholders Equity also known as Shareholders Equity reflects the difference

Stockholders equity also known as shareholders equity

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loss is realized, the amount is reclassified to net income (Investopedia, 2019). “Stockholder’s Equity also known as Shareholder’s Equity reflects the difference between the company’s assets and liabilities, the company’s net worth” (Saint-Leger). Shareholder’s Equity represents the amount of money that would be returned to shareholders if the company’s assets were liquidified and all debt was paid off. These figures show growth, sustainability and areas of improvement for the company. In Peyton Approved the net income is
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$12,505,417.87 from the income statement and total equity is $11,668,540.46 from year end balance sheet. The return of equity 12,505,417.87/11,668,540.46= 1.07 this shows that Peyton Approved earned 107% profit on every dollar invested by shareholders. “Retained Earnings per share (EPS) is the the portion of net income that is retained by the company rather than distributed to its owners as dividends. To calculate you divide reatined earnings by the total number of shares outstanding” (Stockopedia). The EPS for Peyton Approved is calculated by dividing 12,505,417.87- 50,000 by 1,750.00= $7.12 EPS. Peyton Approved can increase their EPS by increasing their net income and this will attract new investors and shareholders. Preferred stock or debt impacts how a company determines changes to their equity. Most shareholders are open to preferred stock because it has a fixed dividend and has the potential to appreciate in price (Ganti, A., 2019). It shows stability in potential cash flow. It’s recorded as a credit on the balance sheet in shareholders equity column rather the debt column. Preferred shareholders usually have no or limited voting rights but are paid out in dividends. Peyton Approved uses straight line depreciation for book and MACRS depreciation for their tax return and was $209,301 higher than book value. Since there has been a recent tax structure change Peyton Approved is a C Corp since beginning these changes. They provide
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