How to Take Over a Company by Buying Its Stock

Obtain the company's most recent quarterly balance sheet. The company's ownership structure is outlined in the section of the balance sheet entitled stockholders' equity.
Determine the number of shares outstanding. This is a line item in stockholders' equity. It tells you how many units of stocks have been issued. For instance, let's say that company XYZ has 100,000 shares outstanding.
Calculate the number of shares you need to purchase in order to take over the company. Multiply the total number of shares outstanding by .51. In this example the answer is .51 multiplied by 100,000, or 51,000.
Calculate the amount of capital you need to raise in order to purchase a 51 percent stake in the company. Determine the current price of company stock by contacting your stockbroker, the company's investor relations department or by doing your own research. Let's say the current share price is $10. In this example, the total capital needed in order to purchase a 51 percent stake in the company is 51,000 multiplied by $10, or $510,000.
Secure capital. If you don't have the full stake, you can request a bank loan or solicit the help of other investors. As leverage or collateral, look at the current cash position of the company -- the first line item on the balance sheet. This amount can be used to pay off any loans once the company is taken over.
Purchase a 51 percent stake in the company. Contact your stockbroker to do this. She will execute the order in waves in order to minimize the increase in stock price as the stock is being purchased.

How to Expense Employee Stock Options (3 Steps)

Debit 'Compensation Expense' and credit 'Additional Paid-In Capital for Stock Options' to record granting the stock options. The expense should be matched to the work completed. In our example, debit 'Compensation Expense' $50,000 and credit 'Additional Paid-In Capital for Stock Options' $50,000. Repeat this entry for each year. The amount is $50,000 instead of $150,000 because the stock options are for three years of compensation, so $150,000 divided by 3 years equals $50,000 per year.
Record the journal entry for exercising the stock option, if they are exercised. Debit 'Cash Received' and 'Additional Paid-In Capital for Stock Options.' 'Cash Received' equals the amount of cash received for the stock, $500,000 in the example and 'Additional Paid-In Capital for Stock Options' equals the amount first recorded, $150,000 in the example. Credit 'Common Stock' by the par value times the number of stock issued, $50,000 in the example, and 'Additional Paid-in Capital in Excess of Par' by the amount needed to balance the journal entry, $600,000 in the example.
Record the journal entry to record the expiration of the options if they expire. Debit 'Additional Paid-In Capital for Stock Options,' $50,000 in the example, and credit 'Additional Paid-In Capital for Expired Stock Options,' $50,000.

How to Calculate Stock Prices From a Balance Sheet

Identify the firm's total stockholder's equity holdings from the balance sheet. This includes the firm's preferred stock, common stock, additional paid-in-capital, and any retained earnings. For example if the firm's balance sheet showed $1 million of preferred stock, $5 million of common stock, $800,000 of additional paid-in-capital, and $500,000 in retained earnings, the firm's total equity holdings value would be 7.3 million. The equation would be 1,000,000 + 5,000,000 + 800,000 + 500,000 = 7,300,000. If the firms total assets are $10 million, this would leave $2.7 million in liabilities. The equation would be 10,000,000 - 7,300,000 = 2,700,000.
Determine the firm's total common stockholder's equity from the balance sheet. Calculate the firm's total common stockholder's equity by subtracting the total preferred stock value from the firm's total stockholder's equity holdings. For example, if the firm's total stock holder's equity is $7.3 million and its preferred stock holdings are $1 million, then the firm's total common stock holder's equity would be $6.3 million. The equation would be 7,300,000 - 1,000,000 = 6,300,000. The $6.3 million represents the total value of the common equity shareholders portion of the firm's total equity capital structure.
Calculate the firm's stock price book value from the balance sheet. Divide the firm's total common stockholder's equity by the average number of common shares outstanding. For example, if the firm's total common stockholder's equity is $6.3 million and the average number of common shares outstanding is $100,000, then the stock price's book value for the firm would be $63. The equation would be 6,300,000 / 100,000 = 63. This would be based on the information obtained from the firm's balance sheet.