Stockholders’ Equity Section
This section outlines the equity structure of the corporation as of the current fiscal period.
| Account | Details | Amount ($) |
|---|---|---|
| Preferred Stock | $100 par, 5% cumulative, 10,000 shares authorized, 2,000 issued | 200,000 |
| Common Stock | $1 par, 500,000 shares authorized, 150,000 issued | 150,000 |
| Additional Paid-in Capital | In excess of par – Common | 850,000 |
| Retained Earnings | Unappropriated | 450,000 |
| Treasury Stock | 5,000 shares at cost | (60,000) |
| Total Equity | 1,590,000 |
Financial Analysis
- Capital Structure: The company relies heavily on common equity, with a significant “Paid-in Capital” buffer, indicating strong initial investor confidence.
- Liquidity & Dividends: With $450,000 in Retained Earnings, the company has a healthy cushion for reinvestment or dividend payouts, though Preferred Stock obligations must be met first.
- Treasury Stock: The buyback of 5,000 shares suggests management believes the stock is undervalued or is attempting to prevent dilution.