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Question 1

What is the purpose of Form 8k

Answer 1

Form 8-K is a form required to be filed by all companies registered with the Securities and Exchange Commission (SEC).

The form reports on MAJOR corporate events, including corporate asset acquisitions/disposals,

accountant changes,
financial statement changes,
management changes,
changes in securities, etc

Question 2

What is a stock dividend?

Answer 2

A stock dividend is additional stock added on to the already outstanding stock

Example

5% Stock Dividend on 100,000 Shares.

Equals 105,000 Shares.

Treated as if it happened in the beginning of the year. Regardless of when it actually happened.

Question 3

How do you calculate Earning Per Share?

Answer 3

Formula

Net Income
Less (Cumulative Preferred Stock Dividend Requirement)
Equals Income Available to Common Shares

Divided by Common Stock Outstanding
Equals Basic Earning Per Common Share

Question 4

What is a Form 10K

Answer 4

Annual Report that must be filed by US Registered Companies(issuers)

Provides details to current and prospective investors about the business of company and relebant risk factors, its financial and operating losses for year, and perspective of of exec leadership

60days for Large Acclerated
75 Days for accelerated
90 for everybody else

Question 5

Form 10Q

Answer 5

Form 10Q is the quarterly report that must be filed by US Registered companies for each of the first three quarters of every fiscal year. Provides an overview of business operations, financial statements, non financial information (legal items, risk factors, recent equity sales) and relevant disclosures

Filing deadlines at quarter end.
40 days for large accelerated filers
45 days for everyone else

Question 5

Where are Earnings per share presented

Answer 5

Face of Income Statement- All Public Companies with Public Offering have to have this

Question 6

What is the EPS Earnings Per Share Formula

Answer 6

EPS = Income Available to Common Share Holders
//// Weighted average number of common shares outstanding

Question 7

Income available to common shareholders

Answer 7

Determined by deducting from the line item income from cont. ops and net income (1) dividens declared in the period on non cum preferred stock (regardless of whether they have been paid) and (2) dividends accum in the period or cumulative pref stock(regardless of whether they have been declared.

Question 8

Weighted Avg Number of Common Shares

Answer 8

The weighted average number of common shares outstanding during period is the average of shares outstanding and assumed to be outstanding for EPS calculations. Shares Sold or reacquired during the period including treasury stock should be weighted for the portion of the period they were outstanding.

Shares Outstanding at the beginning of the period
+ Shares sold during the period (On a time weighted basis)
-shares reacquired during the period (on at time weighted basis)
+stock dividends and stock splits (retroactively adjusted)
- Reverse Stock Splits (retroactively adjusted)

= Weighted Average

Question 9

What determines if Basic EPS or Basic and Diluted EPS have to be shown on Face of Income Statement

Answer 9

Capital Structure (Simple or Complex)

Question 10

What is Simple and Complex Capital Structure?

Answer 10

Simple
- Only Have Common Stocks Outstanding
- No Convertible Bonds
No Outstanding Options
No Outstanding Warrants
No Convertible Preferred equity
Nothing that can be converted to Common Stocks

Presents Basic Per Share amounts for
- Income from continuing ops
For net income on the face on income statement

Complex
- Show Basic and Diluted EPS
Need one of the items above
Convertible bonds
Outstanding Warrants

For Income from Cont Ops
For Net income on face of income statement

Question 11

Basic EPS Formula

Answer 11

Income Available for Common Shareholders

Question 12

Preferred Dividends

Answer 12

Cumulative = Number of Preferred shares x par value x rate
Non Cumulative = Find the amount declared in ret earnings or notes

Cumulative means accumulate if dividend not declared

Question 13

Income Available to Common Stockholders

Answer 13

Deduct from line income from cont ops
- dividends declared in the period on non cumul pref stock regardless if paid
- dividends accum in the period on cum prefer stock regardless of whether they have been declared
If there is a loss from cont ops the amount of the loss should be increased by
- preferred sharedholders dividends or reduces profit per share or increases loss per share

Question 14

Weighted average number of common shares outstanding

Answer 14

The mean average of hsares outsanding and assumed to be outstanding (Year or Quarter) For EPS Calculations
Shares sold ore reacquired during period (including treasury stock) for portion of period they were outstanding

Shares outstanding at beg of period
+ Shares sold during peiod (time weighted)
-Shares reacquired during period(time weighted)
+Stock dividends and stock splits (retro adjusted)
- Reverse stock splits (retro adjusted)
————————————————–
Weighted average number of common shares outstanding