decreased in value but still remains open. A loss becomes realized once the position is sold (Tuovila, 2020). If Peyton decides to sell the securities and accrue a loss, then it will be recognized on the income statement. Shareholder’s equity is the amount retained after subtracting liabilities from the assets. Ideally, Peyton Company will do whatever is needed to be done to take shareholders’ investments, put it towards overall operations and maximize their return on equity (ROE). The current ROE for Peyton approved is 107%. ROE is calculated by taking the net income of the company, $12,505,417.87, and dividing it by the shareholder’s equity of $11,668,540.46. Overall, this means that for every dollar of investment, yields 107% profit from that dollar.
3 ACC 309 Milestone 1 Management Brief According to our text, Earnings per share (EPS) is one of the pieces of financial information most closely examined by financial analysts, investors, and the financial press. On the most basic level, earnings per share represent the amount of net income associated with each share of common stock (Wahlen, J. M., Jones, J. P., & Pagach, D. P, 2017). In order to calculate the EPS, you must first subtract the preferred dividends, 50,000, from the net income, $12,505,417.87. Then you divide the calculated amount by the number of common shares outstanding, 1,750,000, to get the result of EPS to be $7.12.
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- Fall '15