Description
Purpose of Assignment
The purpose of this assignment is to expose you to the basic process involved in the analysis of the cash flow statement.
Assignment Steps
Resources: Appendix A of Financial Accounting: Tools for Business Decision Making
Note: This is a two part assignment.
Part 1
Answer questions A-F in problem CT12-1 in Financial Accounting (p. 640).
Provide an 875-word analysis of your findings.
Include conclusions concerning the management of the company's cash.
Part 2
Complete a 1,050-word summary of findings and recommendations from the following questions:
- What is the par or stated value per share of Apple's common stock?
- What percentage of Apple's authorized common stock was issued at September 27, 2014?
- How many shares of common stock were outstanding at September 28, 2013, and at September 27, 2014?
- Calculate the payout ratio, earnings per share, and return on common stockholders' equity for 2014.
Explanation & Answer
Attached.
Analysis of Stockholder’s Equity: Apple, Inc.
Name of Student
Name of Professor
Course Title
Date Submitted
Executive Summary
Corporations have two sources of capital. These two sources are equity and debts. The
debts are in form of long term loans raised in form of bonds or loans from financial institutions.
The compensation that the corporations pay for debts is interest. The other source by which the
capital is generated is by issuing the common stock to general public. The equity sourced by
issuing common stock is called stockholders equity. The corporations pays dividend to the
stockholders which is a part of the net income. They wealth of stockholders also increase or
decrease with the upward and downward movement in stock price at stock exchange.
Stockholder’s equity shows the amount that belongs to the shareholders of the company. In other
words, it shows the equity held by the investors. Stockholders equity is one among the three
elements of a company’s balance sheet. The accounting equation also clarifies it which states
assets = liabilities + stockholder’s equity.
The stockholder’s equity is further divided into paid in capital, retained earnings and
treasury stock. The paid in capital shows the equity that the company had received when it issued
the shares. Retained earnings are that part of net income that the company does not distributes as
dividends to its common stockholders and keeps it to finance its future finance needs. Treasury
stocks are that portion...
