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Dividends definition

Accounting Tools

Related Courses CFO Guidebook Corporate Finance Treasurer's Guidebook What are Dividends? Dividends are a portion of a company's earnings which it returns to investors , usually as a cash payment. A more mature company that does not need its cash reserves to fund additional growth is the most likely to issue dividends to its investors.

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Earnings available for common stockholders definition

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Earnings available for common stockholders is net after-tax profit, minus any preferred dividends. Example of Earnings Available for Common Stockholders For example, a business reports net after-tax profit of $100,000 and also pays a $10,000 dividend on its outstanding preferred stock.

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Dividend coverage ratio

Accounting Tools

Related Courses Business Ratios Guidebook The Interpretation of Financial Statements What is the Dividend Coverage Ratio? The dividend coverage ratio measures the number of times that a company can pay dividends to its shareholders.

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Dividend per share definition

Accounting Tools

Related Courses Business Ratios Guidebook The Interpretation of Financial Statements What is Dividend per Share? Dividend per share is a measure of the dividend payout per share of a company’s common stock. This is because there is no assurance that these special dividends will be issued again.

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Dividend payout ratio

Accounting Tools

Related Courses Business Ratios Guidebook The Interpretation of Financial Statements What is the Dividend Payout Ratio? The dividend payout ratio measures the proportion of earnings paid out to shareholders as dividends. Conversely, growth investors do not invest in these companies.

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Free cash flow per share definition

Accounting Tools

Related Courses Business Ratios Guidebook The Interpretation of Financial Statements What is Free Cash Flow per Share? A significant amount of free cash flow per share, and especially when it is trending up, indicates that a business has sufficient cash to pay down debt , acquire assets , pay dividends , and so forth.

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Capital employed definition

Accounting Tools

Related Courses Business Ratios Guidebook The Interpretation of Financial Statements What is Capital Employed? The amount of capital employed can be derived in several ways, some of which yield differing results. The amount of capital employed can be compared to net sales to arrive at a ratio of capital employed to sales.