Affiliate Shareholders
A few questions on the balance sheet & income statement?
1. if COGS represends a fairly large portion of revenue, what can you say about the company??
2. if additional paid-in capital (dont ask) is around 90% of shareholders’ equity, what does this mean??
3.what does “Fees paid to affiliates” mean on the income statement??
answer even one question!!
thx in advanced
1. COGS would be relatively high for retail establishment for example about 75% for WMT. It might also be somewhat high for manufacturing companies. A little over 50% for MMM. For service companies it will be considerably less. Just by looking at the COGS you can perhaps guess what line of business it is in without knowing anything else about it. Other than that it does not really mean too much unless you are comparing companies in like industries. If you are a company with a lower % of COGS is obviously doing a better job of managing their business.
2. when a company issues stock, the amount they receive above the par value of the stock is classified as paid in capital. If 90% of shareholder equity is paid in capital it can mean one of several things. 1. It can mean the compay went public not too long ago. 2. It can mean the the company is not retaining their earnings or perhaps they are not earning anything.
For the case of an REIT it would almost assuredly be 90% or more. Also for LP.
SRA International Tops 9% Following Merger With Providence Equity Affiliate
