[Boards: 3 / a / aco / adv / an / asp / b / bant / biz / c / can / cgl / ck / cm / co / cock / d / diy / e / fa / fap / fit / fitlit / g / gd / gif / h / hc / his / hm / hr / i / ic / int / jp / k / lgbt / lit / m / mlp / mlpol / mo / mtv / mu / n / news / o / out / outsoc / p / po / pol / qa / qst / r / r9k / s / s4s / sci / soc / sp / spa / t / tg / toy / trash / trv / tv / u / v / vg / vint / vip / vp / vr / w / wg / wsg / wsr / x / y ] [Search | Free Show | Home]

who keeps the profits a company makes? i was looking at the net

This is a blue board which means that it's for everybody (Safe For Work content only). If you see any adult content, please report it.

Thread replies: 10
Thread images: 3

File: Bill_Gates_June_2015.jpg (880KB, 996x1408px) Image search: [Google]
Bill_Gates_June_2015.jpg
880KB, 996x1408px
who keeps the profits a company makes? i was looking at the net worths of some of the billionaires and most of it is just from their stake in their company.
I know it's common to reinvest profits back into the company but what about what's left or is every penny reinvested?
>>
>>1634472
Every everybody within the company, as an employee is paid by means of salary, and after the shareholders get their quarterly dividend payments, then whatever left over is either used to pay debts, or is reinvested in to the company, or can be held as cash reserves.
>>
File: 1475355325301.png (875KB, 915x1181px) Image search: [Google]
1475355325301.png
875KB, 915x1181px
>>1634472
if you own controlling share of company and you keep money in the company and you believe in the company((s)valuation) , than you are making better return on your money than keeping it in your bank account.
>>
>>1634545
I think OP is asking who owns the money left after all of that (cash reserves)
>>
>>1634644

The company owns it.
>>
>>1634472
>I know it's common to reinvest profits back into the company but what about what's left or is every penny reinvested?
I think you're a bit confused by the words. When they say "reinvest" usually that means using profits to buy property, equipment, or things which will earn the company more revenue later on.

You see many companies will borrow money for that expansion/investing because the potential profits will cover the expense of the loan.

If you imagine it as a linear sequence, which accounting is not: then any cash which is "left over" i.e. doesn't go to dividends, paying expenses, reinvested, paying off debts etc. etc. that left over cash will sit in a bank account accruing interest. Depending on the company they may want a lot of cash on hand because it means they can act quickly on purchases, I imagine commodity traders do this a lot, Berkshire-Hathaway are known for having a lot of liquidity too.
Remember: the finances don't come to a halt just because the quarterly financial statement has been released, it's a snapshot like a high-shutter speed photograph, not a holistic view of the year.
>>
>>1634714
>You see many companies will borrow money for that expansion/investing because the potential profits will cover the expense of the loan.
why?
>>
>>1634725
same reason you borrow money for college, or a plot of farm land, u silly goat.
>>
>>1634644
The leftover cash would just be another asset of the company so it would just fall under the cash reserve section. If more cash reserves aren't really necessary and there is already enough being re-invested (which is rare), then the CEO would technically be forced to increase the dividends to keep the shareholders happy.

In practice this only happens for stagnated blue chips when there isn't really a clear new direction to invest in. If there is no growth potential for their stocks, shareholders (a.k.a. the owners of the company) will obviously demand the running CEO to increase their dividends, like outlined above.
>>
>>1634472
>individuals pay 30% to 40% income tax
>companies only pay 15% on profit
>we should tax company profits higher
Thread posts: 10
Thread images: 3


[Boards: 3 / a / aco / adv / an / asp / b / bant / biz / c / can / cgl / ck / cm / co / cock / d / diy / e / fa / fap / fit / fitlit / g / gd / gif / h / hc / his / hm / hr / i / ic / int / jp / k / lgbt / lit / m / mlp / mlpol / mo / mtv / mu / n / news / o / out / outsoc / p / po / pol / qa / qst / r / r9k / s / s4s / sci / soc / sp / spa / t / tg / toy / trash / trv / tv / u / v / vg / vint / vip / vp / vr / w / wg / wsg / wsr / x / y] [Search | Top | Home]

I'm aware that Imgur.com will stop allowing adult images since 15th of May. I'm taking actions to backup as much data as possible.
Read more on this topic here - https://archived.moe/talk/thread/1694/


If you need a post removed click on it's [Report] button and follow the instruction.
DMCA Content Takedown via dmca.com
All images are hosted on imgur.com.
If you like this website please support us by donating with Bitcoins at 16mKtbZiwW52BLkibtCr8jUg2KVUMTxVQ5
All trademarks and copyrights on this page are owned by their respective parties.
Images uploaded are the responsibility of the Poster. Comments are owned by the Poster.
This is a 4chan archive - all of the content originated from that site.
This means that RandomArchive shows their content, archived.
If you need information for a Poster - contact them.