Buy back from earnings
Also a buyback should only decrease the assets in
assets = liabilities + equity
if the buyback is out of cash that has built up over years. If the buyback is out of this years income statement (that happens to be extraordinarily large), before the cash has a chance to hit the balance sheet, then we don't deduct the cash from assets because the cash never has a chance to become an asset.
so before
60 = 30 +30 (30 shares @ $1)
after
60 = 30 + 30 (20 shares @ $1.50)
Ryan
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a share buy back, page-70
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