Starbucks 2017 Shareholders Equity Section Explain the Share

Starbucks 2017 Shareholders Equity Section

Explain the Shareholders Equity Section , how does contributed capital compare with earned capital, what items that we may not have discussed are included, if you were considering an investment in this firm how would you interpret what you see and would invest in it or not ??

Common stock; $0.001 par value l Additional paid-in capital 1,400 41,100 5,563,200 (155,600) Retained earnings Accumulated other comprehensive income (loss) Shareholders\' equity 5,450,100

Solution

Analyzing shareholders\' or owners’ equity is among the most important exercises for investors and shareholders. Looking at the equity section table above we need to be familiar with the following line items Common Stock $.001 par value 1400 This represents the likely amount originally issued . This par value amount of $1400 million is primarily for legal and issuance purposes Additional Paid-in Capital 41100 The capital in excess of par value is also known as paid-in capital, which represents the premium over stated par value (0.001$) at which the original shares were issued. In the literal sense, it truly represents the capital “paid in” by early-round investors, or capital contributed by owners. This comes primarily in the form of common stock but can also include other related securities such as preference shares or preferred stock. It also changes over time as new shares are issued, such as for acquiring interests in other businesses Retained earnings 5563200 Retained earnings are the cumulative net earnings or profit of a firm after accounting for dividends and are sometimes referred to as the earnings surplus. Retained earnings are the net earnings after dividends that are available reinvestment in the company\'s core business or to pay down its debt. It is recorded under shareholders\' equity on the balance sheet. Accumulated other comprehensive income -155600 Accumulated other comprehensive income (AOCI) is worthy of its own analysis and is a very insightful line item that is best seen as a more expansive view of reported net income on the profit and loss statement. It represents net income plus other comprehensive income, which covers items that don’t flow directly through the income statement Conclusion : After analysing the given line items it is worth to invest.