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Is it true if a firm retains all of its earnings then it will not need any additional funds to support sales growth?
Wiki User
∙ 14y ago
That is an incredibly general conclusion that might apply in a few specific cases, but certainly cannot be taken as a general axiom. It depends not only on the income amount of the business but also on the expansion plans put in place by the company and how flexible the company is in changing those plans to suit other economic contingencies.
Wiki User
∙ 14y ago
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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.
What is security premium reserve?
Securities premium reserve is the amount when securities are issued at premium that is more than their face value.
How do you calculate historical growth rate?
It depends on what you are measuring; growth in sales or appreciation (depreciation) in stock price is pretty straight forward. Growth in portfolio value on the other hand can involve additional mathematical steps if there are deposits (withdrawals) within a period (i.e. monthly, quarterly). You would get a much more meaningful answer if you added more detail to the question.An example would be a great help to someone trying to provide you an answer.
Tertiary sector decline growth?
growth
How does sales growth affect account receivables?
Growth in sales should always be compared to growth in receivables.
If a firm retains all of its earnings then it will not need any additional funds to support sales growth?
False
What are the four factors of PE?
Expected growth of earnings, expected stability of earnings, expected inflation, and yields of competing investments.
What is a stock that reinvests its earnings in the business instead of paying dividends?
A growth stock.
How do I measure the growth when it comes to stock investing?
You have to see if the stock is growing in both sales and earnings. The price-to-earnings ratio is the best-known valuation gauge.
Which of the following was not one of president Harding's goals?
President Harding wanted to support the growth of business and industry.
What are the traits of growth stocks?
There are a lot of different traits of good growth stocks. Two of the traits that connote a good stock are high profit margins and accelerating earnings growth.
How are growth rates used in evaluating stocks?
When evaluating a stock one should look at not only earnings but how those earnings are growing. The rate of growth helps to determine where the earnings will be next quarter, next year, or five years down the road. If you see a stock with a P/E (Price/Earnings) of 100 that is usually do to a high growth rate. The investers a paying a large premium for the company today due to the expected growth of the earnings for the company in the future. This type of investing tends to be more risky due to the fact that the company may fail to meet expected growth rates. On the other hand these stocks can exceed expected growth rates and reward investers who took a chance on them with stellar returns. Growth rates can also be used too compare one company to its peers. Companies in the same industy should have similar growth rates. Differences in these rates may indicate problems within a specific company. Price to earnings of 100 are quite impossible and if they appear it is best to avoid the stock since you will inevitably lose money.
What is a stock that reinvests its earnings in a business instead of paying regular dividends called?
a growth stock
What is the stock that reinvests its earnings in the business instead of paying regular dividend called?
a growth stock
What factors might influence a firm's price-earnings ratio?
The price earnings ratio is influenced by: -the earnings and sales growth of the firms -risk -debt-equity structure of the firm -dividend policy -quality of management -a number of other factors
What is the approximate net worth of frank vandersloot of melaleuca?
Melaleuca's most recent annual sales were reported at over $900 Million. If you use a 10 times earning valuation for the company, that would put the worth of Melaleuca at over $9 Billion. Some people, however, use a 20x earnings for the valuation of a company, and you have growth trends or speculative earnings. Melaleuca has reported new sales records 24 out of 25 years they've been in business with steep growth, the growth trend would likely add additional value to the company.
Levin Inc earned 0.50 per share Its earnings this year were 2.20 What was the growth rate in Levin's earnings per share EPS over the 10-year period?
16%
