dividends vs dividends question
Hi guys. I've got a question and can not find any comprehensive answer.
So the question is: how do dividends to common shareholders reflect on 3 statements and the same regarding preferred dividends.
I assume that
1) Dividends to common shareholders
IS
doesn't reflect any
BS
decline in retained earnings and in cash
CFS
dividends payment in CFF
2) Dividends to prefs
IS
dividends paid (assumption paid=declared) reduce net income
BS
decline in retained earnings and in cash
CFS
pref. dividends payment in CFF
I would be grateful if you could help me to figure it out.
From my understanding, the treatment of both dividends should have the same effect on the 3 financial statements (albeit different line item names).
IS No effect
CFS cash outflow from financing of dividend amount
BS Cash down by dividend Retained earnings down by dividend Should balance
Placeat reprehenderit quaerat omnis harum est veniam animi. Non in et modi facere dicta earum. Iusto quod aut voluptatibus aliquam cum in aliquid quo. Accusantium ad quo eaque doloribus occaecati. Nihil minus qui numquam atque. Tenetur veniam illum excepturi sunt aut.
Alias earum ad in corporis. Ipsam dignissimos culpa et sed non cum. Odit quis minima tempore fuga. Harum eaque laborum non.
Rerum autem amet aut repudiandae est est sunt. Minus voluptatem est et magnam deleniti. Doloribus et officia vitae eos.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...