Retained earnings of Relx (REL) and general equity queries
Posted: February 21st, 2019, 7:09 pm
Hi folks,
I've put together a company valuation spreadsheet and some of the outputs comprise the "Altman Z" scores. An input into the Altman-Z is the "Retained Earnings" which is (I think) the accumulated value of earnings, which aren't used to buy back shares or pay towards dividends. To be quite honest I don't actually know exactly what this value "looks like" in physical terms (i.e. is it cash+accumulated fixed assets/investments etc.), but it is present in most firm's equity statements.
In the statement for Relx, this exact value is not stated in as a single simple term. From https://www.relx.com/~/media/Files/R/RE ... report.pdf at page 121, I paste a simplified copy of the equity statement:
(Note that the fourth column is used what I used for workings out in my spreadsheet, and to illustrate, what I believe to be the representative value for this data for Relx in 2017)
Now, I suspect that the figure which I am looking for (i.e. the value for "Retained Earnings") is actually 169 + 487 = 656, i.e. the sum of the two entries labelled as being reserves of some sort. But could anyone confirm/refute this assumption for me?
Out of interest I note the balance sheet of RELX according to Morningstar also summarises those two entries (that 169 and 487) - however it describes these "Accumulated other comprehensive income" (i.e. not retained earnings). But since accumulated is almost synonymous with retained, I'm hedging my bets that my current assumption could well be correct...
Can anyone help?
many thanks Matt
I've put together a company valuation spreadsheet and some of the outputs comprise the "Altman Z" scores. An input into the Altman-Z is the "Retained Earnings" which is (I think) the accumulated value of earnings, which aren't used to buy back shares or pay towards dividends. To be quite honest I don't actually know exactly what this value "looks like" in physical terms (i.e. is it cash+accumulated fixed assets/investments etc.), but it is present in most firm's equity statements.
In the statement for Relx, this exact value is not stated in as a single simple term. From https://www.relx.com/~/media/Files/R/RE ... report.pdf at page 121, I paste a simplified copy of the equity statement:
(Note that the fourth column is used what I used for workings out in my spreadsheet, and to illustrate, what I believe to be the representative value for this data for Relx in 2017)
Now, I suspect that the figure which I am looking for (i.e. the value for "Retained Earnings") is actually 169 + 487 = 656, i.e. the sum of the two entries labelled as being reserves of some sort. But could anyone confirm/refute this assumption for me?
Out of interest I note the balance sheet of RELX according to Morningstar also summarises those two entries (that 169 and 487) - however it describes these "Accumulated other comprehensive income" (i.e. not retained earnings). But since accumulated is almost synonymous with retained, I'm hedging my bets that my current assumption could well be correct...
Can anyone help?
many thanks Matt