Questions from Financial Reporting

Q: Retroactive recognition is given to stock dividends and stock splits on common

Retroactive recognition is given to stock dividends and stock splits on common stock when computing earnings per share. Why?

Q: Why do many firms try to maintain a stable percentage of earnings

Why do many firms try to maintain a stable percentage of earnings retained?

Q: Why is the price/earnings ratio considered a gauge of future

Why is the price/earnings ratio considered a gauge of future earning power?

Q: Why would an investor ever buy stock in a firm with a

Why would an investor ever buy stock in a firm with a low dividend yield?

Q: Why is book value often meaningless? What improvements to financial statements

Why is book value often meaningless? What improvements to financial statements would make it more meaningful?

Q: Because of assumptions and estimates that go into the preparation of financial

Because of assumptions and estimates that go into the preparation of financial statements, the statements are inaccurate and are, therefore, not a very meaningful tool to determine the profits or loss...

Q: Why should an investor read the note concerning stock options? How

Why should an investor read the note concerning stock options? How might stock options affect profitability?

Q: Why can a relatively small number of stock appreciation rights prove to

Why can a relatively small number of stock appreciation rights prove to be a material drain on future earnings and cash of a company?

Q: Explain how outstanding stock appreciation rights could increase reported income in a

Explain how outstanding stock appreciation rights could increase reported income in a particular year.

Q: Give a simple definition of earnings per share.

Give a simple definition of earnings per share.