[581043]

Hello I am looking at the latest annual report for a company called Mosaic and now I am having trouble finding the Return on Common Stockholder's Equity Ratio.

Before I begin here are the sources for my information: (Rather than linking the 10k)
MOS: Income Statement for MOSAIC COMPANY (THE) - Yahoo! Finance
MOS: Balance Sheet for MOSAIC COMPANY (THE) - Yahoo! Finance

I am using the formula: (Earnings (loss) available for common stockholders/ Average Common Stockholder's Equity"

Here are my calculations for 2007: (419.7)/((4.4+3.9)x.5)
I changed the units to be working in millions.
The answer for 2007 was 101.13

Here are my calculations for 2006: (-132.5)/((3.9+3.9)x.5)
I changed the units to be working in millions.
The answer for 2007 was -33.97

Using the information on the balance sheets and the income statement, do these answers seem reasonably correct? If one looks closely at the income statement there are no preferred dividends for 2007 but there are for 2006. In 2006 there was also a loss, I assume to use negative income when solving these equations but I am not sure if that is correct.

I am not sure of these answers are correct. They must be in percent but they already seem too big. The ratios on the following msn page look significantly different. However I do not even believe these msn ratios accurately reflect what I am trying to solve since Mosaic has a year end March 31st, and Mosaic has already submitted more current information. I would be very appreciative for any help. Thanks in advance.

Key Financial Ratios: Financial Results - Mosaic Co (MOS) - MSN Money

[morgaine300]

:-) You've used the value of the common stock itself, not the equity available to common stockholders. There's a difference.

The number under the common stock is just the par value of the stock itself. See that "surplus." I'm assuming that's the excess amount, meaning the amount it was sold for above par. So even that is part of the value of the stock itself. But "stockholder's equity" is not the same thing as the value of just the stock. It's the TOTAL equity. i.e. the retained earnings and everything belongs to the common stockholders. (Less the value of the preferred, which there doesn't seem to be any.) So you're wanting to use those total stockholder's equity, not the number just under common stock.

[581043]

Ok I see what you mean. Lets see if my new calculations reflect your answer.

2007: (419.7)/((4,183.9+3,530.8)X.5) = .11 OR 11%

2006: (-132.5)/((3530.8+3213.5)X.5) = -.04 OR -4%

Did I solve it correctly this time?

The ratios at MSN money show the Return on Equity to be 21.4

Key Financial Ratios: Financial Results - Mosaic Co (MOS) - MSN Money

Could the website be referring to more recent info or did I not solve it correctly?

[morgaine300]

Rounded to the nearest whole number, yes they're correct. (You may want to check if there is a requirement for where to round to.)

I saw the 21.4. I never saw any year on that, but I assumed it was for another year. All the numbers you've used match up with what I saw on the statements, and I also went to Edgar and looked it up. (Well, I looked up 2006.) This company seems to be all over the board with their income, so it's not surprising another year would be so completely different. As I said on another of your posts, since there's no 5 year numbers, I wonder if this is a fairly new company, and they could be all over the place.

[mishanou1979]

A company changes from an accounting principle that's not generally accepted to one that's generally accepted. The effect of the change should be reported, net of applicable income taxes, in the current
a) income statement after income from continuing operations and before extraordinary items.
b) income statement after extraordinary items
c) retained earnings statement as an adjustment of the opening balance
d) retained earnings statement after net income but before dividends