cumulative

Examples of cumulative in the following topics:

• Calculating the Payback Period

  • Then Cumulative Cash Flow = (Net Cash Flow Year 1 + Net Cash Flow Year 2 + Net Cash Flow Year 3 ... etc.)
  • Accumulate by year until Cumulative Cash Flow is a positive number: that year is the payback year.
  • Then the cumulative positive cash flows are determined for each period.
  • The modified payback period is calculated as the moment in which the cumulative positive cash flow exceeds the total cash outflow.
  • The modified payback period is in year 5, since the cumulative positive cash flows (17000) exceeds the total cash outflows (12000) in year 5.

• Provisions of Preferred Stock

  • Preferred shares have numerous rights which can be attached to them, such as cumulative dividends, convertibility, and participation.
  • One of these rights may be the right to cumulative dividends.
  • Preferred stock shareholders already have rights to dividends before common stock shareholders, but cumulative preferred shares contain the provision that should a company fail to pay out dividends at any time at the stated rate, then the issuer will have to make up for it as time goes on.

• Convertible Stock

  • The shares may also be cumulative or non-cumulative.
  • A cumulative preferred stock accumulates unpaid prior period dividends into the future, while a non-cumulative preferred loses rights to any dividends not paid in prior periods.

• Accounting for Preferred Stock

  • Cumulative preferred stock is preferred stock for which the right to receive a basic dividend, usually each quarter, accumulates if the dividend is not paid.
  • Companies must pay unpaid cumulative preferred dividends before paying any dividends on the common stock.
  • Dividends in arrears are cumulative unpaid dividends, including the quarterly dividends not declared for the current year.
  • Also, the cumulative dividend for the current year is payable.
  • Differentiate between preferred to dividends, noncumulative, cumulative and convertible preferred stock

• Defining the Payback Method

  • Then cumulative cash flow = (net cash flow year one + net cash flow year two + net cash flow year three).
  • Accumulate by year until cumulative cash flow is a positive number, which will be the payback year.

• Preferred Stock

  • Some examples are prior preferred stock (highest priority), preference preferred stock, convertible preferred stock (exchangeable for common stock), cumulative preferred stock, exchangeable preferred stock, participating preferred stock, putable preferred stock, monthly income preferred stock, and non-cumulative preferred stock.

• Disadvantages of the Payback Method

  • Then the cumulative positive cash flows are determined for each period.
  • The modified payback period is calculated as the moment in which the cumulative positive cash flow exceeds the total cash outflow.

• Common and Preferred Stock

  • In general, there are four different types of preferred stock: cumulative preferred stock, non-cumulative preferred stock, participating preferred stock, and convertible preferred stock.
  • With cumulative preferred stock, If the dividend is not paid, it will accumulate for future payment.
  • With non-cumulative preferred stock, dividends will not accumulate if they are unpaid.

• Issuing Stock

  • Some other features associated with preferred stock include convertibility to common stock, non-voting rights, and the potential of shares to be either cumulative or non-cumulative of company dividends.

• Liquidation Preference

  • A corporation's cumulative preferred dividends in arrears at liquidation are payable even if there are not enough accumulated earnings to cover the dividends.
  • Also, the cumulative dividend for the current year is payable.