Saturday, November 14, 2015 12:55:46 AM
Let's look at retained earnings, capital surplus, liability as well as assets.
The liability is the big picture while assets, retained earnings, capital surplus and common shares is the much smaller picture.
Here is how it works. Capital surplus is money owing while retained earnings is what is owed of a portion of the big picture of the liability of all entities considered as well assets minus the collateral is of the big picture.
So if one takes the capital surplus and minus the retained earnings you have the asset value and using the liability divided by the assets will give you the ratio of assets used for collateral.
Take the collateral figure to get the amount of assets that are not used as collateral and bobs your uncle you have the asset value that holds little risk and compare that figure to your market cap.
This has no relationship
to what other entities owe to one or the other it only establishes your own position with the over all position of the company.
Keep in mind that with brackets you are looking at hundreds not thousands. The forward splitting and reverse splitting only changes the liability and assets but does not change the ratio that is your only concern.
I have shared with all of you an experience I'm sure you won't forget and I'm sure for the ones who have followed along will be left in doughting what I have reveled to you today.
Once an asset is consumed by providing collateral there can be no equity sold until
the debt is paid and the asset is said to be fully risked granted it is not often you will see an asset go beyond the last remaining 25% depending on the volitility of the product or comodity in question.
The liability is the big picture while assets, retained earnings, capital surplus and common shares is the much smaller picture.
Here is how it works. Capital surplus is money owing while retained earnings is what is owed of a portion of the big picture of the liability of all entities considered as well assets minus the collateral is of the big picture.
So if one takes the capital surplus and minus the retained earnings you have the asset value and using the liability divided by the assets will give you the ratio of assets used for collateral.
Take the collateral figure to get the amount of assets that are not used as collateral and bobs your uncle you have the asset value that holds little risk and compare that figure to your market cap.
This has no relationship
to what other entities owe to one or the other it only establishes your own position with the over all position of the company.
Keep in mind that with brackets you are looking at hundreds not thousands. The forward splitting and reverse splitting only changes the liability and assets but does not change the ratio that is your only concern.
I have shared with all of you an experience I'm sure you won't forget and I'm sure for the ones who have followed along will be left in doughting what I have reveled to you today.
Once an asset is consumed by providing collateral there can be no equity sold until
the debt is paid and the asset is said to be fully risked granted it is not often you will see an asset go beyond the last remaining 25% depending on the volitility of the product or comodity in question.
