Following is the 2016 stockholders' equity section from the Cisco Systems Inc. balance sheet. Shareholers' Equity (in millions, except par value) July 2016 Preferred stock, no par value: 5 shares authorized; none issued and outstanding $ - Common stock and additional paid-in capital, $0.001 par value: 20,000 shares authorized; 5,695 and 5,751 shares issued and outstanding at July 30, 2016, and July 25, 2015, respectively 46,404 Retained earnings 19,396 Accumulated other comprehensive income (326) Total Cisco shareholders' equity 65,474 Noncontrolling interests (1) Total equity $65,473 For the $46,404 million reported as "common stock and additional paid-in capital," what portion is common stock and what portion is additional paid-in capital? Round to the nearest million. Common stock Additional paid-in capital Cisco’s stock price was $30.53 on July 29, 2016 (the closest trading day to fiscal year-end). Determine Cisco’s market capitalization that day.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Following is the 2016
| Shareholers' Equity (in millions, except par value) | July 2016 |
|---|---|
| $ - | |
| Common stock and additional paid-in capital, $0.001 par value: 20,000 shares authorized; 5,695 and 5,751 shares issued and outstanding at July 30, 2016, and July 25, 2015, respectively | 46,404 |
| Retained earnings | 19,396 |
| Accumulated other comprehensive income | (326) |
| Total Cisco shareholders' equity | 65,474 |
| Noncontrolling interests | (1) |
| Total equity | $65,473 |
For the $46,404 million reported as "common stock and additional paid-in capital," what portion is common stock and what portion is additional paid-in capital?
Round to the nearest million.
| Common stock | |
| Additional paid-in capital | |
Cisco’s stock price was $30.53 on July 29, 2016 (the closest trading day to fiscal year-end). Determine Cisco’s market capitalization that day.
Round to the nearest million. Enter answer in millions.
$Answer
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