Understanding Financial Reports



Understanding Financial Reports

What components of stockholders' equity does each of the companies disclose?

Hennes & Mauritz

H & M is engaged in the sale of clothing and cosmetics in Sweden and internationally. The balance sheet of the Hennes & Mauritz reflects the real value and position of the company. The equity section of the balance sheet of Hennes & Mauritz contains few components that include:

Share capital

Reserves

Retained earnings

Profit for the year

Abercrombie & Fitch

Abercrombie & Fitch, through its subsidiaries, is a retailer that operates stores and direct to consumer. The balance sheet of the Hennes & Mauritz reflects the real value and position of the company. The equity section of the balance sheet of Hennes & Mauritz contains few components that include:

Common stock

Paid-in capital

Retained earnings

Accumulated other comprehensive income (loss), net of tax

Treasury stock

Treasury Stocks

Hennes & Mauritz

The balance sheet of Hennes & Mauritz shows that the company does not possess any treasury stocks.

Abercrombie & Fitch

The balance sheet of Abercrombie & Fitch shows that the company possesses treasury stock. Each and every company possesses and hold certain amount of authorized stocks. Organization can issue these stocks legally. Out of the stock that an organization authorized as legal, the total numbers of shares are owned by the investors. This also includes the officers and the insiders. These shares are known as shares outstanding. The number of the stock that an organization make available for the public so that they can buy or sell it is known as float.

There are certain stocks that are part of the float and outstanding shares and the organization purchases back these shares so, these repurchased shares are known as treasury stocks. Exercising voting rights as well as distribution of these shares are not allowed. a company can hold back the treasury stock to an unlimited period. An organization ...