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When a business is being purchased, if possible, the purchaser should bargain for more of the purchase price being allocated to goodwill and covenants not to compete rather than depreciable assets.
Retained Earnings
The portion of a business's profits not distributed to shareholders, instead being reinvested in the business or used to pay off debt.
Net Income
The total amount of profit earned by a company after all expenses and taxes have been deducted from total revenue.
Cash Dividends
Profits distributed by a company to its shareholders out of the company's current or retained earnings, typically in the form of cash.
Preferred Stock
A class of ownership in a corporation with a specified dividend that is paid before any dividends are paid to common stock holders and typically with no voting rights.
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