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Retained earnings has a cost associated with it because?
There is an opportunity cost associated with stockholder funds
How does the cost of carrying inventory impact the traditional earnings statement of the enterprise?
Cost of carrying inventory has an inverse relationship with the earnings of the enterprise. Ergo, the more we lessen the carrying cost of the inventory, the more we can maximize our earnings. -Noli M. Olan
Is it true that Retained earnings have no cost to the firm?
Yes
What is difference between income and profit?
Income: all valuable earnings. Profit: valuable earnings minus valued effort/cost in achieving initial income.
What are the various elements of costs associated with inventory decisions?
The cost which are associated with the inventory are: 1) Procurement cact 2) Ordering cost 3) Carrying cost
Retained earnings has a cost associated with it because?
There is an opportunity cost associated with stockholder funds
What is the definition of reinvestment assumption?
The definition of reinvestment assumption is an assumption made concerning the rate of return that can be earned on the cash flows generated by capital budgeting projects. The cash flow can be interest, earnings, dividends, or rent.
Explain why retained earnings have an associated opportunity cost?
Retained earnings have an opportunity cost associated with them because they can be invested to earn more rather than keeping them idle. For example reatined earnings can be invested in a savings account in a bank and earn interest but if this is not done the are loosing some extra income and so if they are invested somewhere else, the bank rate will be the opportunity that has been lost. Opportunity cost is the real cost of choosing one thing and not another.
Dividend reinvestment tax free?
no, they are not tax free. The dividends are taxed in the year paid. The dividend reinvestment is a purchase of stock just as if you used cash. You have to track every single purchase transaction of stock from every reinvestment to keep track of the cost basis of each stock, so as to cost it out when you sell. Motley fool has some nice info on this
What is cost ratio calculated by?
Cost Ratio = expenses/earnings
How does the cost of carrying inventory impact the traditional earnings statement of the enterprise?
Cost of carrying inventory has an inverse relationship with the earnings of the enterprise. Ergo, the more we lessen the carrying cost of the inventory, the more we can maximize our earnings. -Noli M. Olan
What is the importance of financial cost ratio?
Earnings Before Tax / Earnings Before Interest and Tax It provides a comparative measure of the cost of debt.
If the flotation cost goes up the cost of retained earnings will?
go up
Is it true that Retained earnings have no cost to the firm?
Yes
What is the formula for equity method?
dEBIT COST AS AN ASSET DEBIT EARNINGS IN ASSET CREDIT DIVIDENDS RECD IN ASSET dEBIT COST AS AN ASSET DEBIT EARNINGS IN ASSET CREDIT DIVIDENDS RECD IN ASSET dEBIT COST AS AN ASSET DEBIT EARNINGS IN ASSET CREDIT DIVIDENDS RECD IN ASSET
Where can you find details of the American Recovery and Reinvestment Act?
You can find details of the American Recovery and Reinvestment Act at Recovery.gov.
What are current year earnings on a balance sheet?
Current year earnings are the net income or loss of the business for the current year. This amount is the difference between all revenues and all expenses on the income statement. Current year earnings are presented on the balance sheet only until they are transferred to retained earnings.
