I don't think you quite followed what I said.
The Equity Bond calculation that I was referring to is obtained by dividing the Pretax Income per Share by the Long Term Corporate Bond Rate for the year.
Therefore the Denominator is a single percentage number not raised to any power. Therefore if the percentage is, say, 3.8% or 4.0%, it won't make that much of a difference to the answer.
However, if it was 3.8% to the power of 10 that would be a different matter ....
Yes, all the Financial Statements, I would say, have an importance in portraying the "state of business affairs" for a company.
Personally, I regard the Income Statement as the most informative, as one has Total Revenue coming into the business, followed by a series of deductions of various costs, etc, then ending with the Net Income.
And it's that number, after deduction of any dividend payment that, to a large extent, adds to the value of the Balance Sheet when it gets algebraically added to Retained Income.
And what would the Balance Sheet be without any addition to the Retained Income, especially if there was no change to Share Capital ? |
