Divisible profit
Topic: Finance
From HandWiki - Reading time: 1 min
Profit or a portion of profit that can be legally distributed as a dividend to the shareholders is known as Divisible Profit.[1] All profit of the company is not divisible and number of factors should be considered while determining divisible profit of the company.[2]
Factors influencing the value of Divisible Profit
Following are some factors that influence the value of divisible profit.
- Transfer to and Creation of reserve
- Creation of Dividend Equalization Reserve
- Working Capital Requirement of the company
- Dividend on Preference Share
- Past Dividend Payout History
References
- ↑ Fundamentals of Auditing
- ↑ Profit versus divisible profit
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