I'm looking at a company who owes me some money and I'm trying to ascertain
it's liquidity.

When a company purchases shares from one of it's shareholders, would the
valuation of the company's assets increase in line with the purchase? Or
would I expect them to stay the same?

In this case the company assets have stayed nominally the same, but the
shareholder's funds have decreased by a similar amount, which of course may
reflect the business itself.

Anthony R. Gold wrote:


It would cause a decrease in assets (cash) with no change in liabilities.

The share capital is a liability. Either that liability would decrease,
or the shares would become assets, and the sssets would increase to
balance the expenditure.

Either assets and liabilities would both decrease, or both would stay
the same, but the type of asset would change from cash to shares.

"David Woolley" wrote in message
...
Anthony R. Gold wrote:


It would cause a decrease in assets (cash) with no change in liabilities.

The share capital is a liability. Either that liability would decrease,
or the shares would become assets, and the sssets would increase to
balance the expenditure.

Either assets and liabilities would both decrease, or both would stay the
same, but the type of asset would change from cash to shares.



In this case the assets stayed the nominally the same.

The shares were a low value £1.00, but they were bought back at a greatly
inflated value, I assume to reflect the value of the perceived company at
the time.

I appreciate the help from both of you.

On Sat, 6 Feb 2010 16:05:43 -0000, "Fredxx" wrote:

I'm looking at a company who owes me some money and I'm trying to ascertain
it's liquidity.

When a company purchases shares from one of it's shareholders, would the
valuation of the company's assets increase in line with the purchase? Or
would I expect them to stay the same?

In this case the company assets have stayed nominally the same, but the
shareholder's funds have decreased by a similar amount, which of course may
reflect the business itself.

There's a lot of nonsense talked in this thread.

Anthony is right in the context of the question. If David was right
every company would have net assets of nil.

"Anthony R. Gold" wrote in message
...
On Sat, 6 Feb 2010 16:05:43 -0000, "Fredxx" wrote:

I'm looking at a company who owes me some money and I'm trying to
ascertain
it's liquidity.

When a company purchases shares from one of it's shareholders, would the
valuation of the company's assets increase in line with the purchase? Or
would I expect them to stay the same?

It would cause a decrease in assets (cash) with no change in liabilities.

In this case the company assets have stayed nominally the same, but the
shareholder's funds have decreased by a similar amount, which of course
may
reflect the business itself.

Tony

Net Assets are the same figure as shareholder's funds, and these have been
reduced by the corresponding purchase of shares.

Is this a good wheeze to make use of your capital allowance?

On Sat, 6 Feb 2010 19:46:59 -0000, "Fredxx" wrote:


"Anthony R. Gold" wrote in message
.. .
On Sat, 6 Feb 2010 16:05:43 -0000, "Fredxx" wrote:

I'm looking at a company who owes me some money and I'm trying to
ascertain
it's liquidity.

When a company purchases shares from one of it's shareholders, would the
valuation of the company's assets increase in line with the purchase? Or
would I expect them to stay the same?

It would cause a decrease in assets (cash) with no change in liabilities.

In this case the company assets have stayed nominally the same, but the
shareholder's funds have decreased by a similar amount, which of course
may
reflect the business itself.

Tony

Net Assets are the same figure as shareholder's funds, and these have been
reduced by the corresponding purchase of shares.

Is this a good wheeze to make use of your capital allowance?

What do you mean by capital allowance?

Peter Saxton wrote:

Anthony is right in the context of the question. If David was right
every company would have net assets of nil.

The do. That is why a balance sheet, for a company with shares,
balances. When the company floats the shares, the share capital becomes
a liability, the the money raised becomes an asset.

"Peter Saxton" wrote in message
...
On Sat, 6 Feb 2010 19:46:59 -0000, "Fredxx" wrote:


"Anthony R. Gold" wrote in message
. ..
On Sat, 6 Feb 2010 16:05:43 -0000, "Fredxx" wrote:

I'm looking at a company who owes me some money and I'm trying to
ascertain
it's liquidity.

When a company purchases shares from one of it's shareholders, would
the
valuation of the company's assets increase in line with the purchase?
Or
would I expect them to stay the same?

It would cause a decrease in assets (cash) with no change in
liabilities.

In this case the company assets have stayed nominally the same, but the
shareholder's funds have decreased by a similar amount, which of course
may
reflect the business itself.

Tony

Net Assets are the same figure as shareholder's funds, and these have been
reduced by the corresponding purchase of shares.

Is this a good wheeze to make use of your capital allowance?

What do you mean by capital allowance?

I meant personal capital gains tax allowance.