 Maria javed
 Mba IT
Topic
Affect of changes in
shareholder
equity
Main headings:
 Introduction to the topic
 Important sub-topics
 Practical study of the organization
 Swot analysis
 ...
Definition of Shareholders
Equity
 Shareholders equity is the difference
between total assets and total liabilities.
It i...
The Importance of Shareholders
in Business
 Shareholders are the owners of
companies. A small business may
have just one ...
Cont……..
Financing:
 One of the primary reasons for going
public is to raise funds from investors.
In return, the company...
Operations:
 Shareholders play both direct and
indirect roles in a company's
operations. They select directors who
appoin...
Governance:
 Public companies usually have formal
corporate governance policies, such
as the composition and roles of
dif...
Control:
 Shareholders usually determine who
controls a public company. A widely
held company, in which there is not a
si...
Components of a Statement of
Shareholders' Equity
 There are six common categories included on
a statement of shareholder...
 Common Stock
Common stock is all stock other than
preferred stock. Common stockholders
are given voting power in shareho...
 Retained Earnings
Retained earnings are the amounts that a
business earns that have not been
distributed as dividends. R...
Treasury Stock:
◦ Treasury stock is stock that a business issues
to investors and then repurchases. A business
could purch...
Practical study of the
organization
 NATIONAL BANK OF PAKISTAN
History
 National bank of Pakistan (NBP) was
developed in 1949. It served as the central
regulatory bank of Pakistan till...
Mission:
 Institutionalizing a merit and performance
based culture
 Creating a distinctive brand identity by
providing t...
VISION
To be recognized as a leader and a
brand synonymous with trust, highest
standards of service
quality, international...
GOAL:
 To enhance profitability and
maximization of NBP share through
increasing leverage of existing
customers base and ...
The Effects of Change in
Shareholder Equity
 The total assets minus liabilities in a
corporation -- as only incorporated
...
Equity versus Market Value
 Equity is not market value. Shares --
which are tiny fractions of ownership in a
company -- a...
Effects
 Equity does not directly affect or cause anything.
Changes in equity can affect the market price of
shares and i...
Factors
 The underlying cause of an increase or a
decrease is more important than the
change itself and may have a larger...
Swot analysis
 Strength:
Limited liability of stockholders
Transferability of shares
Continued life existence
Greater...
Weaknesses:
Complicated information and
operation
Greater degree of government control
and supervision
Weakened credit ...
Opportunities:
 The growing market
 Earn good income
 Build the business over the year
Threats:
Dispute between shareholder, director
and business partner
Poor integration
Target company stock
Conclusion:
 Shareholder's equity is the portion of a
company owned by the shareholders. It
is calculated by subtracting ...
Recommendation:
 Understand from the company’s broker
what demand is like for the shares so
that buyers can quickly be fo...
Acconntings
Acconntings
Upcoming SlideShare
Loading in …5
×

Acconntings

146 views
116 views

Published on

i am a helper

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
146
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Acconntings

  1. 1.  Maria javed  Mba IT
  2. 2. Topic Affect of changes in shareholder equity
  3. 3. Main headings:  Introduction to the topic  Important sub-topics  Practical study of the organization  Swot analysis  Conclusion  recommendation
  4. 4. Definition of Shareholders Equity  Shareholders equity is the difference between total assets and total liabilities. It is also the Share capital retained in the company in addition to the retained earnings minus the treasury shares. Shareholders equity is the amount that shows how the company has been financed with the help of common shares and preferred shares. Shareholders equity is also called Share Capital, Stockholder’s Equity or Net
  5. 5. The Importance of Shareholders in Business  Shareholders are the owners of companies. A small business may have just one shareholder, the founder, while a public company may have thousands of individual and institutional shareholders, such as mutual fund companies, pension funds and hedge funds. Shareholders play an important role in the financing, operations, governance and control aspects of a businesses.
  6. 6. Cont…….. Financing:  One of the primary reasons for going public is to raise funds from investors. In return, the company's founders give up part ownership to these new investors. Private companies and startups may also raise funds through private placements, which are share issues to a select group of individuals and institutions
  7. 7. Operations:  Shareholders play both direct and indirect roles in a company's operations. They select directors who appoint and supervise senior officers, including the chief executive officer and the chief financial officer. They play an indirect role through the stock market.
  8. 8. Governance:  Public companies usually have formal corporate governance policies, such as the composition and roles of different board committees, the role of the chairman, codes of conduct and business ethics. Boards of directors answer to shareholders, not to management. Public companies must provide timely and complete disclosures to shareholders
  9. 9. Control:  Shareholders usually determine who controls a public company. A widely held company, in which there is not a single majority shareholder, is vulnerable to hostile takeover attempts. Shareholders can block such moves if they are satisfied with the current management or if they believe the offering price is insufficient
  10. 10. Components of a Statement of Shareholders' Equity  There are six common categories included on a statement of shareholders' equity.  Preferred Stock Preferred stock is a class of stock whose holders receive dividends from profits before common stockholders do. In the case of a company's going out of business, preferred stockholders are given priority in claiming assets
  11. 11.  Common Stock Common stock is all stock other than preferred stock. Common stockholders are given voting power in shareholder election.  Additional Paid-In Capital Additional paid-in capital is the amount paid in excess of the par value of both preferred and common stock. For example, if the par value of a stock is $100 but was purchased by investors by $110, $100 would be recorded under a stock account, and $10 would be
  12. 12.  Retained Earnings Retained earnings are the amounts that a business earns that have not been distributed as dividends. Retained earnings are often held so a business can reinvest in its development or pay debt. Retained earnings is a summary of the changes in net income. Accumulated Other Comprehensive Income: is the amount of no owner changes in equity that occur other than net income. Unrealized gains or losses on investments are examples of items that fall under this category.
  13. 13. Treasury Stock: ◦ Treasury stock is stock that a business issues to investors and then repurchases. A business could purchase back stock to sell or give to employees or to adjust the market price of the company's stock.
  14. 14. Practical study of the organization  NATIONAL BANK OF PAKISTAN
  15. 15. History  National bank of Pakistan (NBP) was developed in 1949. It served as the central regulatory bank of Pakistan till the time State Bank of Pakistan was established in 1949. National bank of Pakistan is the complete government bank and it undertook government treasury operations. The two major competitors of national bank of Pakistan are united bank limited (UBL) and Habib bank of Pakistan. The first branch was open in I.I Chandigarh road Karachi. And after, they make it the head office of the bank
  16. 16. Mission:  Institutionalizing a merit and performance based culture  Creating a distinctive brand identity by providing the highest standards  of services  Adopting the best international management practices  Maximizing stakeholders value  Discharging our responsibility as a good corporate citizen of Pakistan and in countries where we operate
  17. 17. VISION To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility.
  18. 18. GOAL:  To enhance profitability and maximization of NBP share through increasing leverage of existing customers base and diversified range of products
  19. 19. The Effects of Change in Shareholder Equity  The total assets minus liabilities in a corporation -- as only incorporated companies have shareholders -- is called shareholder equity. Shareholder equity represents the amount of value in a company that shareholders, as owners, collectively own. Any change in company assets or liabilities affects shareholder equity.
  20. 20. Equity versus Market Value  Equity is not market value. Shares -- which are tiny fractions of ownership in a company -- are traded on secondary markets, where a market price per share constantly fluctuates in accordance with investor expectations about the future of the company. Equity reflects measurable value based on the company's current holdings, debts and activities.
  21. 21. Effects  Equity does not directly affect or cause anything. Changes in equity can affect the market price of shares and investor sentiment, but the underlying causes of the change are more important. However, if a company is liquidated, shareholder equity represents what shareholders receive, if anything.  Changes:  Generally, an increase in shareholder equity is a positive change and may cause the market value of shares to increase. Increases mean that either debt and other liabilities have decreased or assets and profits have increased, both of which investors like to see happen and markets see as favorable developments.
  22. 22. Factors  The underlying cause of an increase or a decrease is more important than the change itself and may have a larger effect. An increase in shareholder equity due to an increase in accounts receivable could signal problems in collections, whereas an increase due to high returns on investments means more cash to shareholders and is positive. Similarly, a decrease due to increased debt for a capital expansion or hot acquisition may be read as positive because it signals future growth, whereas a decrease due to
  23. 23. Swot analysis  Strength: Limited liability of stockholders Transferability of shares Continued life existence Greater source of funds Centralized management
  24. 24. Weaknesses: Complicated information and operation Greater degree of government control and supervision Weakened credit standing Heavier income tax
  25. 25. Opportunities:  The growing market  Earn good income  Build the business over the year
  26. 26. Threats: Dispute between shareholder, director and business partner Poor integration Target company stock
  27. 27. Conclusion:  Shareholder's equity is the portion of a company owned by the shareholders. It is calculated by subtracting liabilities from assets. Shareholders are the owners of companies. , while a public company may have thousands of individual and institutional shareholders, such as mutual fund companies, pension funds and hedge funds. Shareholders play an important role in the financing, operations, governance and control aspects of a businesses.
  28. 28. Recommendation:  Understand from the company’s broker what demand is like for the shares so that buyers can quickly be found for the activist’s holding when/if it decides to sell up.  Spend time educating shareholders on the business and its strategy, focusing on long- term value or, in the case of high yielding stocks, income return.  Be prepared to act and react in a variety of scenarios according to a solid strategy. Do not give emotional or hostile quotes to the media.

×