By A look at past performance (POP) is an important factor in determining how much a company’s cash flows will be affected by changes in its underlying assets, liabilities, and equity. For example, if a company has positive POP, the company’s cash flows would be increased if the company sold out of non-recurring assets (i.e. common stock and restricted stock units).
POP is a factor in determining how cash flows are affected by changes in the company’s assets, liabilities, and equity. For example, if a company has positive POP, the companys cash flows would be increased if the company sold out of non-recurring assets i.e. common stock and restricted stock units.
The key to the income statement in the above example is the change in equity. If I have a company with positive POP, the company’s equity is increased. In other words, if I have a company with positive POP, I increase the company’s equity. This means if I sell out of non-recurring assets I sell out of common stock and restricted stock units, I pay a tax of 1% to the treasury.
Some companies sell out of non-recurring assets as a tax-efficient way to increase cash flows. The fact is, the tax rate on non-recurring assets is much higher than the tax rate on recurring assets. The cost of selling out of non-recurring assets can be quite significant, especially when the company is a publicly-traded company.
In addition, I sell out of common stock to increase the company stock portion of my income statement. The tax rate on common stock is the same as the tax rate on restricted stock, so if I sell out of both, my cash flow is lower.
Since the tax rate depends on the cost of selling out of the non-recurring assets, the tax rate on a cost that is common to all companies can be higher than the cost of selling out of a cost that is common to companies that are not publicly traded.
The tax rate is actually the same for the cost of selling out of common stock and the cost of selling out of common stock plus restricted stock, so the tax rate on the cost of selling out of common stock is the same as the tax rate on the cost of selling out of common stock plus restricted stock.
The tax rate on the cost of selling out of common stock is higher than the tax rate on the cost of selling out of common stock plus restricted stock, so the tax rate on the cost of selling out of common stock will affect cash flows for companies that are not public traded.
The cost of selling out of common stock plus restricted stock is higher than the cost of selling out of common stock plus restricted stock, so the tax rate on the cost of selling out of common stock plus restricted stock will affect cash flows for companies that are not public traded.
the tax rate on the cost of selling out of common stock plus restricted stock has been increasing over time, so it could have a negative impact on cash flow for companies that are not public traded.
