Using our example above, let’s say of the $15,000 in total assets, $8,000 is in current assets. A current asset is cash or something that can easily be converted to cash, such as accounts receivable and short-term investments. The particle Reynolds number is important in determining the fall velocity of a particle.

We can cross-check each of the formula figures used in the retained earnings calculation with the other financial statements. When lenders and investors evaluate a business, they often look beyond monthly net profit figures and focus on retained earnings. This is because retained earnings provide a more comprehensive overview of the company’s financial stability and long-term growth potential.

Retained Earnings (RE)

Reynolds also proposed what is now known as the Reynolds averaging of turbulent flows, where quantities such as velocity are expressed as the sum of mean and fluctuating components. Such averaging allows for ‘bulk’ description of turbulent flow, for example using the Reynolds-averaged Navier–Stokes equations. The larger pipe was glass so the behaviour of the layer of re formula the dyed stream could be observed. At the end of this pipe, there was a flow control valve used to vary the water velocity inside the tube. When the velocity was low, the dyed layer remained distinct throughout the entire length of the large tube. When the velocity was increased, the layer broke up at a given point and diffused throughout the fluid’s cross-section.

Your assets include your valuable resources, while your liabilities include any debts or obligations you owe. If your assets are financed by debt, it’ll be listed as a liability on your balance sheet. Assets financed by investors and common Inventory will be listed as shareholder’s equity on your balance sheet.

Retained Earnings

These eddy currents begin to churn the flow, using up energy in the process, which for liquids increases the chances of cavitation. The cost of equity is an implied cost or an opportunity cost of capital. It is the rate of return an investor requires in order to compensate for the risk of investing in the stock.

Read end-to-end for a thorough understanding of accounting formulas or use the list to jump to an equation of your choice. The net income equation, then, shows you how profitable your business’ operations are, but not how healthy your cash flow is. Accounts payable, credit card balances and short-term lines of credit are all current liabilities. Pressure drops[25] seen for fully developed flow of fluids through pipes can be predicted using the Moody diagram which plots the Darcy–Weisbach friction factor f against Reynolds number Re and relative roughness ε/D. The diagram clearly shows the laminar, transition, and turbulent flow regimes as Reynolds number increases.

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Our partners cannot pay us to guarantee favorable reviews of their products or services. On the other hand \$r_e\$ is an input resistance looking into the emitter terminal with the base terminal at AC ground. They both represent the dynamic resistor between the base and the emitter terminals. Stack Exchange network consists of 183 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers.

• With the relative infrequency of material errors, the use of this type of adjustment has been virtually eliminated.
• Beta refers to the volatility or riskiness of a stock relative to all other stocks in the market.
• These basic accounting equations are rather broad, meaning they can apply to a variety of businesses.
• The accounting equation states that a company’s total assets are equal to the sum of its liabilities and its shareholders’ equity.
• Any item that impacts net income (or net loss) will impact the retained earnings.
• Such items include sales revenue, cost of goods sold (COGS), depreciation, and necessary operating expenses.

It is also used to evaluate investment opportunities, as WACC is considered to represent the firm’s opportunity cost of capital. Net Income is the balance amount left for the company after deducting expenses such as the cost of goods sold, salary expenses, interest, taxes, depreciation & amortization from the company’s Net Sales. As for the “Downside Case”, the ending balance declined from $240 million in Year 0 to  $95 million by the end of Year 5 – even with the company attempting to offset the steep losses by gradually cutting off the dividend payments.

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For a company keeping accurate accounts, every business transaction will be represented in at least two of its accounts. For instance, if a business takes a loan from a bank, the borrowed money will be reflected in its balance sheet as both an increase in the company’s assets and an increase in its loan liability. The accounting equation helps to assess whether the business transactions carried out by the company are being accurately reflected in its books and accounts.

This action merely results in disclosing that a portion of the stockholders’ claims will temporarily not be satisfied by a dividend. For various reasons, some firms appropriate part of their retained earnings (RE). Similarly, the iPhone maker, whose fiscal year ends in September, had $70.4 billion in retained earnings as of September 2018. Upgrading to a paid membership gives you access to our extensive collection of plug-and-play Templates designed to power your performance—as well as CFI’s full course catalog and accredited Certification Programs.