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Earning per share = Net income / average shareholders equity
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What is the return on total assets ratio?
Answer:Return on total assets (ROA) equals net income divided by total assets. It is a measure of performance, because the amount that is earned with the assets is divided by the value of the assets (investments). AlternativeInstead of dividing net income by assets, often the interest expense is added back to net income. An alternative measure is thefore:ROA = NOPAT / total assetswhere NOPAT is net operating profit after tax, which is computed as net income plus the interest expense x ( 1 - tax rate).NOPAT shows the profitability of all assets (excluding the cost of financing), but including the 'tax shield' on the interest expense (because interest expense is tax deductable).This is considered to be more precise than dividing net income by assets.Return on equityReturn on equity is a similar ratio, where net income is divided by shareholders' equity. It shows the percentage return that the company has made on its equity.
Do Dividends effect retained earnings?
Yes, dividends will have an impact on the retained earnings. It is important to note that dividends are considered to be a distribution of income and do not appear on the income statement. They will however be reduction in retained earnings on the statement of retained earnings or statement of changes in shareholders' equity (IFRS).
Why are retained earnings reported as part of shareholders' equity?
Retained earnings is part of shareholders' equity. It is considered part of equity because it represents the profits that are retained in the company to fund growth. If a company would have paid out all past profits as dividend, then total assets (cash) would be lower, and retained earnings would have a zero balance. Because net income is computed after claims of third parties (interest, wages, etc), there is no claim of third parties on profits that are retained. So, retained earnings are not a liability.
How do potential shareholders use accounting information?
The shareholders require information on the value of their investment and income that is derived from their shareholding.
How do you figure total equity if given assets liabilities and net income?
It's pretty easy. The basic financial equation is: Assets = Equity + Liabilities. A part of equity is retained earnings. Retained earnings = net income - dividends Equity = Assets - Liabilities
How can shareholders wealth be maximized?
Shareholders wealth can be maximized by maximizing Return on Equity, which is equal to Net Income divided by equity. The higher the net income the more the stock price will increase which will maximize their wealth.
What is profit attributable to equity holders of parent company on an income statement?
Profit attributable to equity holders of the parent company on an income statement refers to the portion of profit that belongs to the shareholders of the parent company. It represents the net income after deducting taxes, expenses, and other deductions and attributing it to the shareholders who own equity in the company. It is a measure of the company's profitability available to its shareholders.
Where can a person find an explanation detailing the definition of return on equity?
The definition of return on equity is the amount of net income returned as a percentage of shareholders equity. More information can be found at Investopedia and Wikipedia.
How do you compute a Return on common stockholders equity?
(Net Income - Preferred Stock Dividends) / Average common stockholders' equity
How do you account for retained profit?
Retained earnings is that portion of net income which is not available for distribution to shareholders and shown in equity section of balance sheet as addition to capital.
If A Company Has Average Total Assets Of 8500000 Average Total Common Stock Of 1000000 Average Total Stockholders' Equity Of 4400000 Sales 10500000 And Net Income Of 860000. What Is Its Return On Equi?
If A Company Has Average Total Assets Of $8,500,000 Average Total Common Stock Of $1,000,000, Average Total Stockholders' Equity Of $4,400,000 Sales $10,500,000 And Net Income Of $860,000. What Is Its Return On Equity Ratio?
What is the return on total assets ratio?
Answer:Return on total assets (ROA) equals net income divided by total assets. It is a measure of performance, because the amount that is earned with the assets is divided by the value of the assets (investments). AlternativeInstead of dividing net income by assets, often the interest expense is added back to net income. An alternative measure is thefore:ROA = NOPAT / total assetswhere NOPAT is net operating profit after tax, which is computed as net income plus the interest expense x ( 1 - tax rate).NOPAT shows the profitability of all assets (excluding the cost of financing), but including the 'tax shield' on the interest expense (because interest expense is tax deductable).This is considered to be more precise than dividing net income by assets.Return on equityReturn on equity is a similar ratio, where net income is divided by shareholders' equity. It shows the percentage return that the company has made on its equity.
What are the features of dividend policy?
Dividend policy is the set of rules a business uses to determine how much of its earnings will go to shareholders. Features include equity, income, expenses and overall profit.
Are reserves equity?
Yes reserve is part of equity as it is created from net income and net income is part of equity as well.
What is standard deviation divided by AVERAGE net income?
beta
How does double taxation of a corporate income occur?
Income to the corporation, as a legal "person", is taxable against the corporation. When the treasury pays dividends from its income to its shareholders, the dividend is taxable again as "income" to the shareholders. A "subchapter S-corporation" avoids this by skipping the corporate taxes and directly taxing the shareholders for any corporate income.
What does 1.82 leverage represent in assets divided by equity ratio?
If you are talking stock marketand you can control other shareholders to 1.82 your voting rights levereged meaning more powerful in a company of partners the originl investment plus increased equity if reinvested in the co may make you the controlling partner as opposed to those who take the income in revenue please check this answer and get back to me as I am not positive I am understanding the concept as u intended
