Module 05 Financial Accounting Project - Analysis and Return on Equity
Estero1
finacctmodule_5_sample_project_paper.docxRunning head: ANALYSIS AND RETURN ON EQUITY – ABC, INC. 1
ANALYSIS AND RETURN ON EQUITY – ABC, INC. 2
Analysis and Return on Equity – ABC, Inc.
Accounting Student Name
Rasmussen College
Author Note
This paper is being submitted on May 10, 2014, for Mark Jonas’s A141/ACG1033 Section 04 Financial Accounting II - 2014 Spring Quarter course.
Analysis and Return on Equity – ABC, Inc.
ABC Corporation’s total stockholders’ equity for the past three years is;
2013 2012 2011
$123,549 $118,210 $76,615
Over the years, the cause for the changes in the stockholders’ equity is credited to the economy and the increasing demand and sales of ABC products.
The largest component of the stockholders’ equity is Retained earnings. ABC’s retained earnings for the past three years are:
|
2013 |
2012 |
2011 |
|
$104,256 |
$101,289 |
$62,841 |
The Company has five million shares of authorized preferred stock, none of which is issued or outstanding. The Company declared and paid cash dividends per common share during the periods presented as follows:
2013
Dividends Per Share Amount in Millions
First ……………………………………………… $2.65 $2,486
Second …………………………………………… $2.65 $2,490
Third ……………………………………………... $3.05 $2,789
Forth ……………………………………………… $3.05 $2,763
As of September 28, 2013, the total unrecognized compensation cost related to outstanding stock options and RSUs was $4.7 billion, which the Company expects to recognize over a weighted-average period of 3.0 years.
The cash dividends declared per common share from 2011 to 2013 are. In 2013 $11.40, 2012 - $2.65, and in 2011 - $0.00
The Company’s stock continues to experience substantial price volatility. Additionally, the Company, the technology industry, and the stock market as a whole have experienced extreme stock price and volume fluctuations that have affected stock prices in ways that may have been unrelated to these companies’ operating performance. Price volatility over a given period may cause the average price at which the Company repurchases its own stock to exceed the stock’s price at a given point in time. The Company believes its stock price reflects expectations of future growth and profitability. The Company also believes its stock price reflects expectations that its cash dividend will continue at current levels or grow and that its current share repurchase program will be fully consummated.
In April 2013 the Company announced a significant increase to its program to return capital to shareholders by raising the total amount it expected to utilize for the program through December 2015 to $100 billion. This included increasing its share repurchase authorization to $60 billion and raising its quarterly dividend to $3.05 per common share beginning in May 2013. During 2013, the Company utilized $23.0 billion to repurchase common shares and paid dividends of $10.5 billion or $11.40 per common share. In conjunction with its capital return program, in May 2013 the Company issued $17.0 billion of notes with varying maturities through 2043. (Investor.ABC.com, 2014)
References
Investor.ABC.com, (2014). ABC Inc. - Financial History. Available at: http://investor.ABC.com/financials.cfm (Accessed 10 May. 2014)
First Amount in Millions Dividends Per Share 4.3 2.4 Second Amount in Millions Dividends Per Share 2.5 4.4 Third Amount in Millions Dividends Per Share 3.5 1.8 Forth Amount in Millions Dividends Per Share 4.5 2.8
($ millions, except shares in thousands and per share amounts)
