Question

Using the most recent annual report of the corporation that you have been using in our discussions and that you have accessed online at the company’s website, examine the balance sheet and accompanying notes of your company. Answer the following questions:

1. What percentage of total liabilities and stockholders’ equity is stockholders’ equity? What kinds of stock does the company have?

2. Is retained earnings a significant component of stockholders’ equity?

3. Does the company have treasury stock? What effect does it have on total stockholders’ equity?

4. Indicate the Earnings Per Share. What does this tell you about your corporation's profitability?

Balance Sheet

All numbers in thousands

Period Ending	12/31/2017	12/31/2016	12/31/2015
Current Assets
Cash And Cash Equivalents	11,972,000	7,826,000	7,686,000
Short Term Investments	608,000	701,000	508,000
Net Receivables	31,630,000	29,245,000	28,554,000
Inventory	1,583,000	1,553,000	1,551,000
Other Current Assets	3,942,000	4,564,000	4,205,000
Total Current Assets	49,735,000	43,888,000	42,504,000
Long Term Investments	14,469,000	13,606,000	15,200,000
Property Plant and Equipment	11,116,000	10,830,000	10,727,000
Goodwill	36,788,000	36,199,000	32,021,000
Intangible Assets	3,742,000	4,688,000	3,487,000
Accumulated Amortization	-	-	-
Other Assets	4,643,000	3,034,000	1,734,000
Deferred Long Term Asset Charges	4,862,000	5,224,000	4,822,000
Total Assets	125,356,000	117,470,000	110,495,000
Current Liabilities
Accounts Payable	18,824,000	17,726,000	16,788,000
Short/Current Long Term Debt	6,987,000	7,513,000	6,461,000
Other Current Liabilities	11,552,000	11,035,000	11,021,000
Total Current Liabilities	37,363,000	36,275,000	34,269,000
Long Term Debt	39,837,000	34,655,000	33,428,000
Other Liabilities	26,685,000	24,547,000	24,603,000
Deferred Long Term Liability Charges	3,746,000	3,600,000	3,771,000
Minority Interest	131,000	146,000	162,000
Negative Goodwill	-	-	-
Total Liabilities	107,762,000	99,224,000	96,233,000
Stockholders' Equity
Misc. Stocks Options Warrants	-	-	-
Redeemable Preferred Stock	-	-	-
Preferred Stock	-	-	-
Common Stock	54,566,000	53,935,000	53,262,000
Retained Earnings	153,126,000	152,759,000	146,124,000
Treasury Stock	-163,507,000	-159,050,000	-155,518,000
Capital Surplus	-	-	-
Other Stockholder Equity	-26,592,000	-29,398,000	-29,607,000
Total Stockholder Equity	17,594,000	18,246,000	14,262,000
Net Tangible Assets	-22,936,000	-22,641,000	-21,246,000

Answer 1

Question 1

As seen in above, the company has 3 categories of stock listed:

a. Common Stock

b. Preferred Stock

c. Redeemable Preferred Stock

However, the Company has only issued 1 type of stock - Common Stock.

The stockholders equity as a percentage of the total equity and liabilities is computed as:

17594000/(17594000 + 107762000) = 17594000/125356000 = 14.04%

Question 2

The Retained Earnings Form a very significant portion of stockholders equity. It is almost 153126000/17594000 = 8.7 times of the equity. The overall stockholders equity is low primarily because of the treasury stock which implies most of the retained earnings have been applied towards repurchase of stock.

Question 3

The Company does have treasury stock amounting to Rs. 163507000. THis amount represents stock that has been repurchased and hence has a negative impact on the stockholders equity. It results in reducing the overall stockholders equity.

Question 4

Information for the earnings per share is not available above. It can be computed as :

Net Income for 2017/Number of Common Stock outstanding