Equity question?
Brayden
subscriber Posts: 1
I'm having trouble understanding equity value for a private company.
Here's a scenario that I'm not understanding.
- I own 50% of a company.
- The company is doing $1,000,000 in sales profit.
- We reinvest $200k into the company.
- We distribute $200k to employee payroll.
- Another $100k covers insurance and all other loose end costs.
- So now there is a clean $500k take away after all expenses.
Because I own 50% of the company, do I take $250k home in cash?
Thats the only logical explanation for equity flow that I can think of.
Here's a scenario that I'm not understanding.
- I own 50% of a company.
- The company is doing $1,000,000 in sales profit.
- We reinvest $200k into the company.
- We distribute $200k to employee payroll.
- Another $100k covers insurance and all other loose end costs.
- So now there is a clean $500k take away after all expenses.
Because I own 50% of the company, do I take $250k home in cash?
Thats the only logical explanation for equity flow that I can think of.
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