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Flow to Equity (FTE) Approach

Owner's equity is explained.

For accounting period ending January 31, 2010 Total assets increased by $25,000, owner's equity increased by $12,000 = $13,000 increase in total liabilities. How are the financial rights of the owner increasing liabilities?

Bowers Investments: Owners Equity/Intercorporate Equity

Bowers Investments bought 1,000 shares of IDA, Inc. common stock on Jan 1, Year 1, for $5,000 and 1,000 share of JOE, Inc. common stock on July 1, Year 1, for $6,000. IDA declared $500 in dividends, and JOE declared $600 in dividends on December 31, Year 1. At the end of Year 1, the market value of the IDA stock was $4,500 and

Cost of Equity. Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 30 percent

Cost of Equity. Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 30 percent, and the current dividend yield is 2 percent. It beta is 1.2, the market risk premium is 8 percent, and the risk-free rate is 4 percent. a. Ca

Equity Accounts

A. Suppose that the company issues 10,000 shares at $4 a share. Which of the figures below would change? b. What would happen to the company's books if instead it bought back 1,000 shares at $4 per share? Common stock ($1 par value) $60,000 Additional paid-in capital 10,000 Retained earnings 30

Recalculate ratios

Recalculate ratios 5-11 from using the numbers from the Pro Forma statement below. 5) Times interest earned 6) Debt-to-equity ratio 7) Net profit margin 8) Return on equity 9) Total asset turnover 10) Return on assets 11) Price-earnings ratio Boeing Pro Forma Income Statement Revenue 2007 % of

Estimating Free Cash Flow, Return, Financial Leverage etc.

11-1 Meltzer Electronics estimates that its total financing needs for the coming year will be $34.5 million. During the coming fiscal year, the firm's required financing payments on its debt-and-equity financing will toal $12.9 million. The firm's financial manager estimates that operating cash flows for the coming year will tot

RNOA and Value of Equity

2. Quanta, Inc. reported an after-tax profit margin of 3.50%, an asset turnover of 4.00 on net operating assets of $20.0 billion, and net financial obligations of $7.0 billion on January 31, 2000. Analysts expect that the sales of Quanta, Inc. will grow 8% on average in the future. Analysts also expect a. If the profit margi

Value of Equity

A. Quanta, Inc. reported an after-tax profit margin of 3.50%, an asset turnover of 4.00 on net operating assets of $20.0 billion, and net financial obligations of $7.0 billion on January 31, 2000. Analysts expect that the sales of Quanta, Inc. will grow 8% on average in the future. Analysts also expect 1. If the profit margi

Changes in Stockholder Equity

Attached are the equity sections of the balance sheets for the years 2008 and 2009 reported by MASR Inc. The overall value of stockholder equity has risen from $2,000,000 to $7,500,000. Use the attached statement to discover why this happened: The company paid dividends of $200,000 during fiscal 2009. a)What was MA's net inc

Statement of Shareholder's Equity: Contents and Uses

Explain what can be found on a statement of stockholders' equity. How can the information contained within the stockholder equity statement be used for management and investor decision making? Provide specific examples of situations in which the stockholder equity information might be used.

Stockholders equity based on account balance

What is the tatal stockholders equity based on the following account balances? Common stock $300,000 Paid in capital in excess of par 30,000 Retained earnings 100,000 Treasury Stock 20,000

Use of the Cost or Equity Method [AICPA Adapted]

Since Boomer Company's inception, Madison Company has owned 18 percent of Boomer's outstanding common stock. Madison provides three key management personnel to Boomer and purchased 25 percent of Boomer's output during 20X7. Boomer is profitable. On January 2, 20X8, Madison purchased additionalcommon stock to finance Boomer's exp

Operating Cash Flow Statement Examples

Please see the attached spreadsheet. I have performed the calculations, and there is decidedly a downward trend in the ratios. I need to answer the following question on the usefulness of the statement in determining stock price performance and the company's condition. Queston: How did your view of the company's condition ch

Prepare the Stockholders' Equity Section

Hello this is my problem case. I am doing something wrong here... and I am not sure what am I overlooking This is the question Using the following accounts and balances, prepare the Stockholders' Equity section of the balance sheet. Thirty thousand shares of common stock are authorized, and 2,000 shares have been reacquire

Cost of Equity for ABC Inc.

ABC Inc. has debt with both a face and a market value of $3,000. This debt has a coupon rate of 7% and pays interest annually. The expected earnings before interest and taxes is $1,200, the tax rate is 34%, and the unlevered cost of capital is 12%. What is the firm's cost of equity?

Important information about Equity method

Jones Company possesses a 25 percent interest in the outstanding voting shares of Sandridge Company.Under what circumstances might Jones decide that the equity method would not be appropriate to account for this investment? Although the equity method is a generally accepted accounting principle (GAAP), recognition of equityin

Preferred stock, Common stock, paid-in capital and stockholder's equity.

Western Atlantic Corporation recently lost some of its accounting records in a fire on August 10, 2006. The following information has been salvaged from the rubble: The $100 par value, preferred stock account has a balance of $289,000. The $50 par value, common stock was issued for an average price of $55 per share. The Paid

Stockholders Equity - Jajoo

The Stockholders equity accounts of Jajoo Corporation on January 1, 2005 were as follows: Preferred Stock (10%, $100 par no cumulative, 5,000 shares authorized) $ 300,000 Common Stock ($5 stated value, 300,000 shares authorized) 1,000.000 Paid-in Capital in Excess of Par Value- Preferred Stock

The Cost of Capital - Methods to Estimate Cost of Common Equity

I have the answer for a problem below. I understand how to calculate CAPM and Risk Premium, but not how to calculate the Discounted Cash Flow (DCF) method. Problem: Acme Corporation's next expected dividend (D1) is $2.50. The firm has maintained a constant payment ratio of 50 percent during the past 7 years. Seven years a

Equity Transactions and Statement Preparation

This problem is to prepare the stockholders' equity for the company with showing all computations. P13-3 (Equity Transactions and Statement Preparation) Amado Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2007, the following accounts were included in stockho

Maximal flow problem: Disney

The road system around the hotel complex on International Drive (node 1) to Disney World (node 11) in Orlando, Florida, is shown in the network of Figure 12.27. The numbers by the nodes represent the traffic flow in hundreds of cars per hour. What is the maximum flow of cars from the hotel complex to Disney World? P See attac

Stockholders' Equity Transactions,.,

6 Selected data from the comparative balance sheets of Labtec Company as of December 31, Year 1, and Year 2 appear below: Year 1 Year 2 Preferred stock, $100 Par, Issued at Par $0 $ 600,000 Common Stock, $30 Par

Equity Accounts: Alfred Cake Company

Equity Accounts. The authorized share capital of the Alfred Cake Company is 100,000 shares. The equity is currently shown in the company's books as follows: Common stock ($1.00 par value) $60,000 Additional paid-in capital 10,000 Retained earnings 30,000 Common equity 100,000 Trea

Max flow problem

Is it true that if I multiply all the edge capacities in an s-t flow problem by a positive constant k > 0, then the maximum flow increases by the same factor of k.