final chap 11 and 12 Flashcards
Outstanding shares
issued shares- treasury stock
or
common stock / par value
stock dividends change vs dont change
what they change
1. common stock (more stock outstanding)
2. shares outstanding
3. retained earnings
what they dont change
- cash flows
- total SE
- par value
stock split
- does not require JE
stock split changes:
- shares outstanding (go up by split factor)
- par value (go down by split factor)
everything else is the same
cash dividends change
-retained earnings
-cash flows
large stock dividend
- just pay attention to par value multiplied by number of shares
DEBIT RE, par value * number of shares
CREDIT CS, par value * number of shares
small stock dividend
- more precise, put in extra time to find APIC and CS.
DEBIT RE is market price * number of shares
CREDIT:
CS is par value * number of shares
APIC is the remainder
Retained earnings formula=
Beginning balance + net income − dividends = ending balance
EPS
net income / weighted average number of common shares outstanding
Dividend yield ratio
dividend per share/ market price per share
Dividend per share
total dividends/ shares outstanding
treasury stock
decreases Assets and SE
dividend JE
declaration
DEBIT RE
CREDIT DP
payment
CREDIT DP
DEBIT Cash
preferred stock
- less risky because of priority payments of dividends and assets before CS
- fixed dividend rate
- does not have voting rights
current dividend preference
non cumulative
- short memory, not beyond this year
current div pref= par value * percent * number of SO
cumulative divided preference
- dividends in arrears: any unpaid dividends on PS accumulated
- current div pref= par value * percent * number of SO
- dividends in arrears= current div pref * years
- total preferred dividend= current div pref+ dividends in arrears
making a cash flow statement
- company, statement, for year ended …, unit
- split into operating, investing and financing
- Cash flows from operating : net income
+ depreciation expense from income statement
+ loss on fixed asset from IS
- gains on fixed assets from IS
+ decreases in CA
- increases in CA
- decreases in CL
+ increases in CL
includes: interest payments + Interest revenue + dividend revenue
end with “Net cash provided by op activities”
- Cash flows from investing :
purchase and sale of :
fixed assets + intangibles (PPE)
+
“investments” - cash flows from financing:
external sources of financing
NP (not including interest), BP, Equity
operating cash flow statement
net income
+ depreciation expense from income statement
+ loss on fixed asset from IS
- gains on fixed assets from IS
+ decreases in CA
- increases in CA
- decreases in CL
+ increases in CL
includes: interest payments + Interest revenue + dividend revenue
calling bonds over par
loss on bond call= BP * percentage
DEBIT BP always
DEBIT LOSS
CREDIT CASH always
calling bonds under par
gain on bond call = BP * percentage
DEBIT BP always
CREDIT GAIN
CREDIT CASH always
calling bonds at end
DEBIT BP always
CREDIT CASH always
use market rate for
PV table
interest expense
Accounts payable turnover
- The measure of how quickly a company pays its suppliers
- Accounts payable turnover = COGS / average accounts payable
Average day to pay payables = 365 / accounts payable turnover
calling bonds
DEBIT BONDS PAYABLE
CREDIT CASH
over par( loss) or under par( gain) is the difference,
THINK UG!
debt to equity ratio=
total liabilities/ total SE
quality income ratio=
cash flow from operating activities / net income
