BUSACC 0030 Lecture Notes - Lecture 11: Legal Personality, Retained Earnings, Financial Ratio
Document Summary
Material covered: chapter 11, reporting and interpreting owners" equity. Announcements: next few weeks we will be going over chapter 11 and review for the final. Study guide and sample questions will be opened up after class. Understanding the business: advantages of a corporation a. i. Easy transfer of ownership provides limited liability: because a corporation is a separate legal entity, it can b. i. Ownership of a corporation: stockholders" rights a. i. Authorized, issued, and outstanding shares: authorized shares are the max. number of shares of capital stock that can be sold to the public b. Earnings per share: earnings per share is probably the single most widely watched financial ratio, eps = (net income) / (average number of shares outstanding for the period) Sale of stock in secondary markets: transactions between two investors that do not affect the corporations accounting records. Repurchase of stock: repurchased stock is called treasury stock. Treasury stock has no voting or dividend rights.