Just a leading question…
I just paid 600 million in profits, mainly to 3 major shareholders. Does that come off my holding company profit? Also foes it affect the leaderboards - negative 600 million from me and positive 600 million to my shareholders?
I expect it does but think that is wrong. IRL, companies declare profit and then pay dividends as a % of that profit, but analysts will look at the headline profit when assessing company performance.
Secondary question - when a hoarder like me buys many stocks, what happens with the capital profit / loss on those stocks? How does that affect holding company leaderboards?
Third bit…
I revert to my very early rants that players are separate entities to holding companies. Player performance should include the value of their operating businesses inside a holding co. plus cash and stock / bond holdings.
That cash can only be gained through dividends or bond interest.
A holding company can declare a dividend before it’s IPO (but maybe after 4k bxp)
When that holding co pays dividends the player as well as all the other shareholders get a dividend and then the player as a separate entity buys stocks, bonds or whatever.
Last bit is food for thought… I would like answers on questions 1 and 2 pls
Hey …
(1) The way DIVIDENDS should work from an accounting perspective is as follows:
-
Cash is reduced by the total dividends paid.
-
Retained Earnings (on the Balance Sheet) is reduced by the same amount.
-
Dividends do not affect historical Profit earned by the business — Profit being what appears on the Income Statement (P&L).
-
In accounting, Retained Earnings is your historical (cumulative) profit held in the business (“retained”). Retained meaning “not paid out as dividends.”
That’s the way it SHOULD work, but your good question triggered a review to confirm this and we discovered that it is not working that way and it may indeed be affecting your profit and leaderboard status. That’s now on the fix list for this month. We are not sure if we can accurately fix the leaderboards this round but we are going to try.
(2) Holding Company purchase of stocks and bonds. Stocks and Bonds appear as ASSETS on your HC Balance Sheet. The value remains as BOOK VALUE (original purchase cost). We elected not to change the value based on MARKET VALUE because that created some challenges for us and left it open to some value manipulation (some of which we have since locked down on the markets). When you sell the stocks and bonds, the increase in value is captured properly on your financial statements.
(3) Separating the player from the HC. That would require some significant changes to the code and our support materials, so there would have to be BIG benefits to doing so, and I’m not so sure I can clearly see the benefits?
2 Likes
OK - Would be good if corrected for next round if possible. Found another problem I was looking for but will post in bugs.
I know the split is a big change to coding. It is a clear improvement in game dynamics for experienced players but adds a level of complexity for new ones. The advantage would be to separate success in managing operating companies from what a player does once he has funds (rather than shoving all in together) The game is good as it is so I guess if it’s not broke, don’t fix it… Just a wish-list item 
1 Like
