{"id":5037,"date":"2011-05-26T11:58:38","date_gmt":"2011-05-26T06:28:38","guid":{"rendered":"http:\/\/www.niftylivecharts.com\/blog\/?p=5037"},"modified":"2011-06-09T23:15:20","modified_gmt":"2011-06-09T17:45:20","slug":"know-how-financial-statement-analysis-helps-to-evaluate-stock-investment","status":"publish","type":"post","link":"https:\/\/www.niftylivecharts.com\/blog\/know-how-financial-statement-analysis-helps-to-evaluate-stock-investment\/","title":{"rendered":"Know How Financial Statement Analysis Helps to Evaluate Stock Investment"},"content":{"rendered":"<p>A company&#8217;s <a href=\"http:\/\/monsterhols.com\/stocks\/picking-the-best-stock-investments.html\" target=\"_blank\">stock investment<\/a> accounts are crucial knowledge for management as well as for the investors. It shows a path to both management and investors alike to determine where the company&#8217;s extra cash has been deployed.<img loading=\"lazy\" decoding=\"async\" class=\"alignright size-thumbnail wp-image-5039\" title=\"Financial Statement Analysis\" src=\"https:\/\/www.niftylivecharts.com\/blog\/wp-content\/uploads\/2011\/05\/Financial-Statement-Analysis-150x150.jpg\" alt=\"\" width=\"150\" height=\"150\" srcset=\"https:\/\/www.niftylivecharts.com\/blog\/wp-content\/uploads\/2011\/05\/Financial-Statement-Analysis-150x150.jpg 150w, https:\/\/www.niftylivecharts.com\/blog\/wp-content\/uploads\/2011\/05\/Financial-Statement-Analysis-75x75.jpg 75w\" sizes=\"auto, (max-width: 150px) 100vw, 150px\" \/><\/p>\n<ul>\n<li> First of all, decide what accounting methodology      is being used to account for the company&#8217;s stock investments. You can      consider the option of the cost method, the equity method and consolidated      financial statements. Which method should be selected entirely depends on      the percentage of company-owned stock. You are free to use the cost method      if it&#8217;s below 20 percent, the equity method if it\u2019s between 20 and 50      percent, and if the company owns more than 50 percent then the stock      investment should be reported on the consolidated financial      statement.<\/li>\n<\/ul>\n<ul>\n<li>Assess the stock investments by recording the      acquisition costs in an asset count on the balance sheet under the equity      investments classification if the cost method is being implemented. When      the stock investment gets sold, a gain or loss is marked for the      difference between its acquisition cost and the proceeds generated from      the sale. The transaction is recorded by increasing the cash account along      with the proceeds from the sale and decreasing the equity investments      account and recording a gain on the sale.<\/li>\n<\/ul>\n<ul>\n<li>Appraise stock investments, if the equity method is      applied, by treating them as an asset and when a proportional share of an      associate company&#8217;s net income raises the investment and proportional      payment of dividends decreases it. Remember, the proportional share of the      company\u2019s net income is recorded as a single-line item.<\/li>\n<\/ul>\n<ul>\n<li>Weigh up the investment using consolidated financial      statements if more than 50 percent of the stock investment is accounted.      More than 50 percent stock ownership makes a subsidiary and its financial      statements consolidate into the parent&#8217;s.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>A company&#8217;s stock investment accounts are crucial knowledge for management as well as for the investors. It shows a path to both management and investors alike to determine where the company&#8217;s extra cash has been deployed. First of all, decide what accounting methodology is being used to account for the company&#8217;s stock investments. You can [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[4548,11361],"class_list":{"0":"post-5037","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-general","7":"tag-analysis","8":"tag-financial","9":"entry","10":"has-post-thumbnail"},"_links":{"self":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/5037","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/comments?post=5037"}],"version-history":[{"count":0,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/5037\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/media?parent=5037"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/categories?post=5037"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/tags?post=5037"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}