Accounting Help

[GoldenEagle]

<table width="100%" cellpadding="2" cellspacing="0" border="0"> <tbody><tr><td colspan="5" height="10">
</td></tr><tr><td class="yfnc_d" colspan="5"> Stockholders' Equity </td></tr><tr><td colspan="2">Misc Stocks Options Warrants</td><td align="right"> - </td><td align="right"> - </td><td align="right"> - </td></tr><tr><td colspan="2">Redeemable Preferred Stock</td><td align="right"> - </td><td align="right"> - </td><td align="right"> - </td></tr><tr><td colspan="2">Preferred Stock</td><td align="right"> - </td><td align="right"> - </td><td align="right"> - </td></tr><tr><td colspan="2">Common Stock</td><td align="right">669,000 </td><td align="right">669,000 </td><td align="right">669,000 </td></tr><tr><td colspan="2">Retained Earnings</td><td align="right">82,624,000 </td><td align="right">76,624,000 </td><td align="right">67,514,000 </td></tr><tr><td colspan="2">Treasury Stock</td><td align="right">(24,597,000)</td><td align="right">(26,627,000)</td><td align="right">(26,916,000)</td></tr><tr><td colspan="2">Capital Surplus</td><td align="right">17,497,000 </td><td align="right">17,288,000 </td><td align="right">16,693,000 </td></tr><tr><td colspan="2">Other Stockholder Equity</td><td align="right">2,987,000 </td><td align="right">(4,248,000)</td><td align="right">(3,136,000)</td></tr><tr><td colspan="5" height="1" bgcolor="#333333"><spacer type="block" width="5" height="1"></td></tr><tr><td colspan="2">Total Stockholder Equity</td><td align="right">79,180,000 </td><td align="right">63,706,000 </td><td align="right">54,824,000 </td></tr><tr><td colspan="5" height="2" bgcolor="#333333"><spacer type="block" width="5" height="1"></td></tr><tr><td colspan="2">Net Tangible Assets</td><td align="right">$24,155,000 </td><td align="right">$17,526,000 </td><td align="right">$19,775,000 </td></tr></tbody> </table>
Above is the Stockholder's equity report for General Electirc. I am a bit confused on some of the terms and was wondering if anonye could help. GE issued 669,000 common shares, right? I know that the Oustanding shares is the difference between common stock and treasury stock. I am assmuming the 24,597,000 is the dollar amount that GE bought in tresuary stock. I have calculated the earnings per share is $22.42. How do I calculate the Tresuary stock if I do not know how much they paid for it? I also need to know how many shares a corporation is authorized to sale. I have had little luck finding that.

[Philliesfan980]

Do you have better financial statements than this? Normally in the notes to the Financial Statements, they'll tell you the number of shares they are authorized to issue.

[Philliesfan980]

Dola

According to the GE Website

They've been authorized to issue 13,250,000 shares of C/S at .06 (par). They've been authorized to issue 50,000,000 share of preferred stock at $1 par value. By looking above at their figures above, they haven't issued any of their preferred stock.

http://www.ge.com/en/commitment/governance/corporation/article_authorised_shares.htm


- Out of the 13,500,000 that they've been authorized to issue, they've issued 11,145,212 shares of C/S. We can prove this by looking above at the C/S $ amount. 669,000/.06(par value per share) = 11,150,000 (rounding). See the exact # in the notes at this page

http://www.ge.com/ar2002/financial/notes/note24.jsp

- It appears that they are using the COST method to acquire the treasury stock. Here's the general entry for acquring the treasury stock.

(DEBIT) Treasury Stock (Price they PAID for it)
(CREDIT) Cash (Price they PAID for it)

** EDIT **

You can use the same link as above to find out the # of shares in treasury.

http://www.ge.com/ar2002/financial/notes/note24.jsp

[GoldenEagle]

I am calculating finanical leverge which is Total Assests divided by Stockerholder's equity. I get an insane figure. I have the Total Assets as being 647,483,000 and the Stockholerd's Equity being $79,180,000 - which gives me somthing like 81.7% That could not be right.

[GoldenEagle]

Check that, I figured it out. I got an 18% return on equity. Does that sound right?

[damnMikeBrown]

Yeah, that's much more reasonable.

There's no paid in excess of par on there...for the CS issuance. Perhaps that's the Capital Surplus?

edit: I'll churn the numbers after lunch..it'll be a good refresher for me.

[GoldenEagle]

I will post my numbers here for the entire project so you can double check my work. I just have to have it turned in by 4 PM CST.

[GoldenEagle]

Earning per share for the last 3 years:
2003 - $22.42
2002 - $21.10
2001 - $20.45

Authorized shares - 50,000,000
Issued - 11,145,212
Outstanding - 8,294,212
Return on Assests - 2.2%
Return on Equity - 18.0%
$ Amount of Tresuary Stock - $24,597,000
Net Cash flow from Operating Actvities - $30,289,000
More or Less than Net Income - More
Good or Bad? - Not sure on this one. I think Good since it shows the compnay is reinvesting in the company?
5 ratios provided by corporation - Still have to look around a bit for this

[GoldenEagle]

You realize the numbers in financial statements are in the 1000s right?
I just use the numbers on the sheet. I do not think it matters much to my teacher.

[Desnudo]

I nominate this thread for last one you should read before going to sleep.

[rkmsuf]

http://www.geocities.com/don_ameche_jp/assets/images/films3/trading.jpg


Sell! Sell! Sell!

[damnMikeBrown]

Ok, only using what you've provided above, and not looking at the links. . .

Net Income(RE end bal-RE beg bal)
2003: $6,000,000
2002: $9,110,000
2001: can not be determined based off first post

Your shares outstanding looks correct.

RoA=Operating Income/Total Assets
this can not be worked from the first post, need Inc. Statement info there for OI
if your 2.2% is correct, then that is horrid
think about it...what can you get a 2.2% return on....pretty much anything.
As an investor, you want to think the $$ you put into a firm is going to be used to create something better than you could do. A 2.2% RoA is not better than you, I, or Billy Bob could do. If their capital budgeting is returning a 2.2% RoA, they'd be better off taking the $$ they have, and investing it pretty much anywhere else. They have a lot of non or low performing assets.

Bah, you were asking about CF and NI...yes, it's good that CF is larger than NI.

RoE=Net Income/Common Equity (2003) NI=6,000,000 CE=79,180,000
2003: 6,-,-/79,180,- = 7.578%

EPS=Net Income/#shares outstanding or RoE(CE/#shares oustanding)
2003: 6,-,-/8,294,212 = .7234 = 7.578%(79,180,-/8,294,212)

Book Value per share=common equity/#shares outstanding
2003: 79,180,000/8,294,212 = 9.546

Maybe I'm reading something incorrectly here. . .that NI for GE looks painfully low.

[GoldenEagle]

I had a Net Income of $15,020,000, per this page:

http://finance.yahoo.com/q/is?s=GE&annual

[GoldenEagle]

MY RoA came from NI / TA

NI = 15,002,000
TA = 647,483,000

= 2.2%

[damnMikeBrown]

I'd believe that sooner than I'd believe my post.

I can not reconcile the numbers in your first post with that though.

It's a simple thing to find NI when you have the RE. Why mine is $6,-,- and yours is $15,-,- I can not explain. Mine is from the RE reported in the first post.

Ask your professor?

as to the RoA...something vaguely clicking in my head about finance RoA v. accting RoA...using OI v. NI

[gottimd]

You could use some of your capital surplus to buy some $10 lapdances.

[Professor58]

In defense of the low ROA, you have to remember that GE is 40% financial service company. It is a low asset return market, so you use leverage (other people's money) and the AAA rating to make the needed return to the shareholders' . You can support the leverage required because the cash flows are very predictable. Our capital requirement requests use a 20% ROE hurdle rate for a go/ no go investment.