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In accounting, the share capital of a corporation is the nominal value of issued shares (that is, the sum of their par values, sometimes indicated on share certificates).). If the allocation price of shares is greater than the par value, as in a rights issue, the shares are said to be sold at a premium (variously called share premium, additional paid-in capital or paid-in capital in excess of p
In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business partnership, a corporation, private limited company or other organization such as government or not-for-profit entity.
Capital surplus, also called share premium, is an account which may appear on a corporation's balance sheet, as a component of shareholders' equity, which represents the amount the corporation raises on the issue of shares in excess of their par value (nominal value) of the shares (common stock).
The retained earnings account on the balance sheet is said to represent an "accumulation of earnings" since net profits and losses are added/subtracted from the account from period to period. Retained Earnings are part of the "Statement of Changes in Equity". The general equation can be expressed as following:
Various types of equity can appear on a balance sheet, depending on the form and purpose of the business entity. Preferred stock, share capital (or capital stock) and capital surplus (or additional paid-in capital) reflect original contributions to the business from its investors or organizers.
Investors should like the company's strong balance sheet and history of double-digit percentage returns on invested capital. Utility players Utility stocks typically pay attractive dividends.
Treasury shares are essentially the same as unissued capital, which is not classified as an asset on the balance sheet, as an asset should have probable future economic benefits. Treasury shares simply reduce ordinary share capital.
A company’s balance sheet is generally broken down into three major categories, including: Assets: Includes cash, cash equivalents , marketable securities, accounts receivable, inventory ...