Why does "Retained Earnings" grow in value while the other two line items appear constant?

Q: Price-earnings ratio is computed by dividing annual dividends by average market value per share.…

A: Formula to compute Price -Earning ratio is: Price -Earning ratio =Market price per shareEarning per…

Q: Which one of the following is a measure of long term solvency? A. Price earning ratio B. Profit…

A: Solvency refers to a firm's ability to meet its long term financial obligations or debt.

Q: What is earnings management?

A: Earnings refer to the amount earned by the business during the financial year. It may vary from year…

Q: Earnings per share can affect market prices of commonstock. Can market prices affect earnings per…

A:

Q: :-What are two estimates that impact the Amount of reported income significantly c How? When…

A: 1) Income statement is one of the three Financial statement on that stakeholder rely on . For…

Q: In general, what is the concept of earnings and profit designed to represent?

A: When addressing the bottom line of a company's income statement, the concept of earnings is most…

Q: porate earnings and profits (E&P) is correct?

A: E&P refers to the accumulated earnings and profits of a company. The E&P of a company…

Q: Differentiate between book value and market value. Explain why GAAPallows smoothing earnings…

A: The net value of a company's assets, as represented on its balance sheet, is roughly equal to the…

Q: Why is the distinction between paid-in capital andretained earnings important?

A:

Q: s it true of false that stock sold for amounts in excess of par value results in a gain reported on…

A: A company issues its common stock at par value or at an amount more than the par value. The amount…

Q: a) What is the purpose of internal earnings targets? (b) What is the risk associated with internal…

A: ‘’Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is the most likely impact on return on equity of an increase in operating expense margin, all…

A: Operating expenses are required to run the business. AN increase in operating expenses reduces the…

Q: How can we calculate earnings per share?

A: Earnings per share means amount of net profit earned per each share of common stock. Investor…

Q: True or False Returns from the overall market can be thought of as a combination of three factors:…

A: The operating profit of a corporation is the entire earnings from its core business tasks for a…

Q: Why must a cost be assigned to retained earnings?

A: Likewise, debt and equity financing, retained earnings has also some cost. The predictor care about…

Q: The gain or loss on the net monetary position in a hyperinflationary economy shall be included in:…

A: This question is answered according to IAS 29 "Financial Reporting in Hyperinflationary Economies"

Q: Which of the following will reduce Retained Earnings? a. Declaration of a stock dividend b. Payment…

A: Retained earnings refer to the part of net income that is left over after paying all the expenses.…

Q: Define the following terms. Basic earnings per share. Potentially dilutive security. Diluted…

A: Basic earning per share is the amount of a company’s earnings allocable to each share of its common…

Q: When is the forecasted growth rate in residual operating income the same as the forecasted growth…

A: The income generated in excess of the minimum rate of return refers to the residual income. The…

Q: What is meant by ‘daily earnings at risk’ (DEAR)?

A: Daily earnings at risk depends on the following factors: 1. Position of the dollar rate 2.…

Q: there any relationship between the CFPS, EPS and DPS? Is there any correlation between dividends…

A: Explanation- A- DIVIDEND PER SHARE IS CONSTANT FOR ALL YEAR IRRESPECTIVE OF EPS AND CASHFLOW.…

Q: Which one of the following is most closely related to the net present value profile? A: Payback B:…

A: The net present value method is used to evaluate the investment projects. We can evaluate the…

Q: A measure of profitability analysis is a. times interest earned. b. cash flow per share.…

A: Evaluation of profitability: In general, financial ratios are used to evaluate capabilities,…

Q: Which of the following is NOT a profitability ratio? Select one: a. Return on Equity b. Net Profit…

A:

Q: Define each of the following terms: g. Repatriation of earnings; political risk

A: Repatriation means the conversion to a single domestic currency of any foreign currency.…

Q: Earnings will Increase/Decrease

A: A cash flow statement refers to the statement that is helpful in tracking the cash movement in an…

Q: What is meant by earnings persistence?

A: Earning persistence is one of the attributes of accounting earnings. Basically, it means the…

Q: Net earnings can be greater than gross earnings

A: The gross earning is calculated by deducting the cost of goods sold from the sales revenue of the…

Q: Gross Profit Ratio for a firm remains same but the Net Profit Ratio is decreasing. The reason for…

A: Gross profit is given by sales revenue minus cost of goods sold. Gross profit =Sales revenue- cost…

Q: Revenues increase or decrease equity?

A: Revenue is the income generated from business operations. It is the overall amount of income that is…

Q: thod of income approach that consider the factor

A: Introduction: When valuing a property that generates a source of income, the income technique is…

Q: Why is "Projecting Growth Beyond What the Capital Being Valued Will Support" considered a common…

A: Income Approach There are two different model which was incurred in the income approach.  The…

Q: Why is earnings per share called “the bottom line”? What is EBIT, or operatingincome?

A: Earnings per share is the company’s net revenue/income that can be distributed among its…

Q: Assume that a firm's total assets and sales remain constant. Would an increase in each of the ratios…

A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Which of the following would not result in an increase in both the current ratio and the acid test…

A: Current ratio is a financial ratio which helps to determine or analyse the liquidity in a company in…

Q: Define Diluted Earnings Per Share.

A: Earnings per share: An amount available as earnings for each of the common shares outstanding for a…

Q: Yes, because operating income increases.

A: It is pertinent to note that higher the contribution higher the operating income since fixed cost…

Q: 2. How do earnings trends compare in terms of both the direction and stability of income?

A: Earnings are profits earned by the business which is very important for a business to survive.…

Q: 2. How do non-GAAP earnings relate to the concept of earnings quality?

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Q: Why does an increase in the ratio of current assets to total assets decrease both profits and risk…

A: Current assets and current liabilities are utilized to decide the liquidity of an organization. At…

Q: In other words, what does the beginning balance of retained profits mean? Is it the same as the…

A: Retained profits are that portion of the net profits which are held by a company instead of…

Q: Explain the types Earnings?

A: Earning is the amount of income that an individual or organization receives during a year.

Q: What is a “dividend return” and a “capital gain,” and how do these terms enterthe arbitrage equation…

A: The Arbitrage pricing equation is  E(Ri) = E(Rf) +Beta * [E(I)-E(Rf)] E(Ri) is the return on the…

Q: What are the impotance of Earning per Share and Diluted Earnings per Share in making economic…

A: Diluted EPS= Net Income−Preferred DividendsWASO+CDS​ where: EPS=Earnings per share WASO=Weighted…

Q: What are the characteristics of a strong income statement?

A: