Difference Between Common Stock and Retained Earnings

Key Difference – Common Stock vs Retained Earnings

普通股和保留收益之间的关键区别在于common stock is the shares that represent the ownership of the company by equity shareholderswhereasretained earnings are a portion of the company’s net income which is left after paying out dividends to shareholders.Both these items are recorded under theequitysection of thebalance sheet。重要的是要清楚地确定普通股和保留收益之间的差异，因为它们的组成和目的不同。

内容
1.Overview and Key Difference
2.What is Common Stock
3.保留收入是多少
4.Side by Side Comparison – Common Stock vs Retained Earnings
5.概括

What is Common Stock?

Common stock is the shares that represent the ownership of the company by equityshareholders。普通股也被同义‘common shares’, ‘ordinary shares’和‘equity shares’。股票的值称为“ PAR值”或“名义值”。普通股的总价值按以下计算。

普通股的价值=每股名义价值*股票数

When common stock is offered to the general public for the first time, it is done through anInitial Public Offering (IPO)where the company is listed in a股票交易for the first time and start trading shares. The main objective of issuing shares by a company is to gain access to a large pool of funds to attract investment opportunities. Subsequently, these shares will be traded in primary or secondary stock exchanges. An investor who is interested in purchasing shares of the company can do so by paying the market price of the shares, and the investor becomes a shareholder of the company.

Characteristics of Common Stock

Voting Rights

普通股有权获得公司的投票权。向股权股东提供投票权，使他们能够避免其他各方参与合并，收购和董事会成员的选举。每个股份都投票。但是，在某些情况下，某些公司也可能发行一部分非投票普通股。

收到股息

普通股东有权接收dividendsout of profits earned. Dividends are received at a fluctuating rate since the dividends will be paid after dividend for preference stockholders are settled.

风险

In a situation of companyliquidation停止,所有优秀的债权人和偏好ckholders will be paid off before common stockholders. Thus, the common stock carries higher risk in comparison with preference stock.

保留收入是多少？

保留收入是公司的一部分net income在向股东支付股息后剩下的。保留收益将重新投资于业务或用于还清债务。这些也称为“保留盈余”。保留收入可以计算为

Retained Earnings = Beginning Retained Earnings + Net Income – Dividends

The amount of retained earnings each year will be dependent on the dividend pay-out ratio and the retention ratio. The company may have a policy to maintain these two ratios at a specific level; for instance, the company may decide to distribute 40% of profits in the form of dividends and retain the remaining 60%, although this combination may change over time. If the company make a net loss in the current year but still intends to pay dividends, this can be done through the available profits in retained earnings accumulated over the years. Sometimes certain shareholders may claim that they do not wish to receive a dividend for a given year and would like to see more profits reinvested in the business which will facilitate extensive growth during upcoming years.

What is the difference between Common Stock and Retained Earnings?

普通股与保留收入
Common stock is the shares that represent the ownership of the company by equity shareholders.	保留收入是公司的一部分net income which is left after paying out dividends to shareholders.
目的
The purpose of common stock is to raise funds for business operations.	The purpose of retained earnings is to make reinvestments in the main business activity.
Formula
Value of common stock can be calculated as (Nominal value per share* Number of shares).	Value of retained earnings can be calculated as (Beginning Retained Earnings + Net Income – Dividends).

概括– Common Stock vs Retained Earnings

普通股和保留收益之间的区别在于，普通股表示该公司股东拥有公司的股份，而保留收益是公司净收益的一部分，这是向股东支付股息后留下的。无论市场价值如何，普通股总是以资产负债表的标准价值记录。保留收益被许多公司视为重要资产，因为它通过减少获得债务的需求来协助投资。

Reference:
1.“普通股”。Investopedia。N.P.，2014年10月2日。2017年5月16日。。
2.“什么是普通股，什么是优先股？股票类型及其差异解释了。”街道。TheStreet，2014年5月7日。2017年5月16日。。
3.“保留收入”。Investopedia。N.P.，2015年9月30日。2017年5月16日。。

Image Courtesy:
1. “Lehigh Coal and Navigation Company Stock Certificate” By Downingsf – Own work(CC BY-SA 3.0)viaCommons Wikimedia