| Appropriated retained earnings | Retained earnings separately reported to inform stockholders of funding needs.
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| Authorized stock | Total amount of stock that a corporation's charter authorizes it to issue.
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| Basic earnings per share | Net income less any preferred dividends and then divided by weighted-average common shares outstanding.
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| Book value per common share | Recorded amount of equity applicable to common shares divided by the number of common shares outstanding.
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| Book value per preferred share | Equity applicable to preferred shares (equals its call price [or par value if it is not callable] plus any cumulative dividends in arrears) divided by the number of preferred shares outstanding.
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| Call price | Amount that must be paid to call and retire a callable preferred stock or a callable bond.
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| Callable preferred stock | Preferred stock that the issuing corporation, at its option, may retire by paying the call price plus any dividends in arrears.
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| Capital stock | General term referring to a corporation's stock used in obtaining capital (owner financing).
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| Change in an accounting estimate | Change in an accounting estimate that results from new information, subsequent developments, or improved judgment that impacts current and future periods.
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| Common stock | Corporation's basic ownership share; also generically called capital stock.
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| Complex capital structure | Capital structure that includes outstanding rights or options to purchase common stock, or securities that are convertible into common stock.
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| Convertible preferred stock | Preferred stock with an option to exchange it for common stock at a specified rate.
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| Corporation | Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders.
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| Cumulative preferred stock | Preferred stock on which undeclared dividends accumulate until paid; common stockholders cannot receive dividends until cumulative dividends are paid.
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| Date of declaration | Date the directors vote to pay a dividend.
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| Date of payment | Date the corporation makes the dividend payment.
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| Date of record | Date directors specify for identifying stockholders to receive dividends.
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| Diluted earnings per share | Earnings per share calculation that requires dilutive securities be added to the denominator of the basic EPS calculation.
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| Dilutive securities | Securities having the potential to increase common shares outstanding; examples are options, rights, convertible bonds, and convertible preferred stock.
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| Discount on stock | Difference between the par value of stock and its issue price when issued at a price below par value.
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| Dividend in arrears | Unpaid dividend on cumulative preferred stock; must be paid before any regular dividends on preferred stock and before any dividends on common stock.
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| Dividend yield | Ratio of the annual amount of cash dividends distributed to common shareholders relative to the common stock's market value (price).
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| Earnings per share (EPS) | Amount of income earned by each share of a company's outstanding common stock; also called net income per share.
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| Financial leverage | Earning a higher return on equity by paying dividends on preferred stock or interest on debt at a rate lower than the return earned with the assets from issuing preferred stock or debt; also called trading on the equity.
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| Large stock dividend | Stock dividend that is more than 25% of the previously outstanding shares.
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| Liquidating cash dividend | Distribution of assets that returns part of the original investment to stockholders; deducted from contributed capital accounts.
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| Market value per share | Price at which stock is bought or sold.
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| Minimum legal capital | Amount of assets defined by law that stockholders must (potentially) invest in a corporation; usually defined as par value of the stock; intended to protect creditors.
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| Noncumulative preferred stock | Preferred stock on which the right to receive dividends is lost for any period when dividends are not declared.
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| Nonparticipating preferred stock | Preferred stock on which dividends are
limited to a maximum amount each year.
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| No-par value stock | Stock class that has not been assigned a par (or stated) value by the corporate charter.
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| Organization expenses | Costs such as legal fees and promoter fees to bring an entity into existence.
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| Paid-in capital | (See contributed capital.)
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| Paid-in capital in excess of par
value | Amount received from issuance of
stock that is in excess of the stock's par value.
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| Participating preferred stock | Preferred stock that shares with common
stockholders any dividends paid in excess of the percent stated on preferred stock.
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| Par value | Value assigned a share of stock by the corporate charter when the stock is authorized.
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| Par value stock | Class of stock assigned a par value by the corporate charter.
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| Preemptive right | Stockholders' right to maintain their proportionate interest in a corporation with any additional shares issued.
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| Preferred stock | Stock with a priority status over common stockholders in one or more ways, such as paying dividends or distributing assets.
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| Premium on stock | (See contributed capital in excess of par value.)
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| Price-earnings (PE) ratio | Ratio of a company's current market value per share to its earnings per share; also called price-to-earnings.
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| Prior period adjustment | Correction of an error in a prior year that is reported in the statement of retained earnings (or statement of stockholders' equity) net of any income tax effects.
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| Proxy | Legal document giving a stockholder's agent the power to exercise the stockholder's voting rights.
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| Restricted retained earnings | Retained earnings are not available for dividends because of legal or contractual limitations.
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| Retained earnings | Cumulative income less cumulative losses and dividends.
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| Retained earnings deficit | Debit (abnormal) balance in Retained Earnings; occurs when cumulative losses and dividends exceed cumulative income; also called accumulated deficit.
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| Reverse stock split | Occurs when a corporation calls in its stock and replaces each share with less than one new share; increases both market value per share and any par or stated value per share.
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| Simple capital structure | Capital structure that consists of only common stock and nonconvertible preferred stock; consists of no dilutive securities.
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| Small stock dividend | Stock dividend that is 25% or less of a corporation's previously outstanding shares.
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| Stated value stock | No-par stock assigned a stated value per share; this amount is recorded in the stock account when the stock is issued.
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| Statement of stockholders' equity | Financial statement that lists the beginning and ending balances of each major equity account and describes all changes in those accounts.
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| Stock dividend | Corporation's distribution of its own stock to its stockholders without the receipt of any payment.
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| Stock options | Rights to purchase common stock at a fixed price over a specified period of time.
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| Stock split | Occurs when a corporation calls in its stock and replaces each share with more than one new share; decreases both the market value per share and any par or stated value per share.
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| Stockholders' equity | A corporation's equity; also called shareholders' equity or corporate capital.
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| Treasury stock | Corporation's own stock that it reacquired and still holds.
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