Key Parts of Stockholders' Equity Reporting

Let’s break down what stockholders' equity means in a simpler way. Here are the important pieces:

1. Common Stock:
   This is a type of ownership in a company. When you hear "common stock," think of shares that people can buy. Companies often set a small value for these shares, like $1 each. In 2022, there were about$10.63 trillion worth of common stock in the U.S.

2. Preferred Stock:
   This is a special kind of stock. It usually means you get paid dividends and might get money back if the company sells off its assets.
   In 2021, the average dividend rate for preferred stock was about 5%.

3. Additional Paid-in Capital (APIC):
   This is extra money that shareholders pay when they buy stock beyond the par value. In other words, it’s the amount over the basic price that helps boost the company’s total equity.
   Sometimes, APIC can be a lot higher than the total value of common stock.

4. Retained Earnings:
   This is the money a company has made but hasn’t paid out in dividends. Instead, it keeps this money to help the business grow.
   As of the third quarter of 2023, U.S. companies had around $17.5 trillion in retained earnings.

5. Treasury Stock:
   These are shares that a company has bought back. When a company does this, it reduces the total amount of equity available.
   In 2022, U.S. companies bought back more than $500 billion in their own shares.

Each part of stockholders' equity helps investors understand how a company is doing financially!