At the Ask, come on, take any balance sheet, "retained earnings" is around "surplus capital" (or "common stock plus surplus capital) and in more mature companies, the capital has been paid many times over, here are few examples, MSFT $30 B C.S. vs $21.4 B in retained earnings, CSCO, $20 vs $6.8 B, INTC a more "mature outfit", $8.9 vs $27.2 B, SUNW with $6.2 vs $6.8, even AMGN at $3.3 vs $1.73 will very rapidly have its retained earnings exceed its paid in capital. More mature companies, you'll have to add historical dividends paid out, but take two examples, like GE at $16.8 B and $67B (plus mind you a cum of $25 B of repurchased shares), and MRK, at $7 B vs $30 B in earnings (and $22 B in repurchased shares). So many companies are far from being that ponzi scheme you are describing. Even AMAT which we love to "malign, has $2.7 B in capital surplus vs $5.7 B in retained earnings. Actually, MSFT has not "paid back" its "start up" (namely money issued fro stock, not just at startup) capital, INTC has few times over...
Zeev |
