Impact of a Stock Split on a Financial Statement

For Apple, the stock price rose from about $ 565 per share to about $ 80 per share due to the seven-to-one split. Apple's $ 80 per share will attract more investors, not $ 565 per share. The impact of price split on these investors is purely psychological. The actual value of the shares will not change, but the decline in stock prices will affect the view of the stock and invite new investors to open their wallets. Secondly, many investors believe that splitting is beneficial to their portfolio.

Impact on stock price - The company's stock price may be greatly affected by financial statements. In making investment decisions, some investors use financial statements to determine the feasibility of investing in particular shares. The rise and fall of the stock price will depend on the information contained in the report (Stansky, 2010). Determination of financing - Financial statements may affect the possibility of financing. If the company attempts to withdraw a production loan, the lender periodically reviews the company's financial statements. Lenders are likely to invest in companies with good financial statements

There is no doubt that financial statements are the most important information sources for individual investors. All companies that do business on stock exchanges such as New York Stock Exchange, American Stock Exchange, Nasdaq, etc. must submit their financial statements to the Securities and Exchange Commission (SEC) in a single quarter. Simply visit www.sec.gov and click "Search company application form". The balance sheet is divided into two parts. The asset is on the left side (the upper part of the example below), and the liabilities and shareholders' equity are on the right side (or the lower side). If the asset value is equal to the sum of the liabilities and shareholders' equity, the balance sheet is called 'balance' (by the way, the balance sheet must always be balanced)