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How to calculate additional investments in equity

The equity of a company is the number of shares of investors in the company. Equity includes investment from shareowners and retained profits, which is the company’s profit that has not yet been paid as a dividend. The total investment capital from shareholders is called total capital contribution, or total capital contribution. When a company receives additional investments by selling shares to shareholders, that company increases the total investment capital paid on its balance sheet, which increases that company’s equity. You can calculate this change to determine how many additional amounts a company has received.

How to calculate additional investments in equity
How to calculate additional investments in equity

Step 1
Take the company’s balance sheet for two consecutive accounting periods from its 10th quarterly Q filing or from a 10 K annual filing. You can obtain these records from the EDGAR online database of the U.S. Securities and Exchange Commission or from the investor relations section on the company’s website.

Step 2
Find the total capital contributed by the company, listed in the Equity section of shareholders of the most recent balance sheet. For example, let’s say the company’s most recent balance sheet shows a total of $500,000 in total capital paid.

Step 3
Determine the total amount of capital paid, listed on the balance sheet of the previous period. In this example, suppose the balance sheet of the previous period shows that the total investment capital paid is $400,000.

Step 4
Subtract the total paid capital of the previous period with the total paid capital of the most recent period to calculate additional investments from stock owners. In this example, subtract $400,000 from $500,000 for $100,000 of additional investment.

Tip
Oversee the additional investments the company receives from shareholders. Additional investments can help the company grow, but can also dilute your investment in the company, resulting in a smaller ownership ratio.

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