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Stockholder's deficit

Started by seaver69
over 12 years ago
Posts: 40
Member since: Dec 2010
Discussion about
Apologies in advance if this is a stupid question... I have a decent understanding of financial statements, but not of the business model behind a co-op. Is it normal for one to have a stockholder's deficit? Also, what is the source of contributed capital in excess of par in a co-op? There has obviously never been a public offering.
Response by NWT
over 12 years ago
Posts: 6643
Member since: Sep 2008

Yes, you'll most likely have a yearly deficit, mostly because of depreciation. There'll be a cash-flow statement to reconcile all that. Look at several years of those to see whether maintenance is high enough, where any assessments are going, etc.

The "additional paid-in capital" (as mine calls it) is the cost of land and building, less the $1-per-share par.

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