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Strategies & Market Trends : Value Investing
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To: scipio_caelestis who wrote (61289)9/6/2018 3:33:21 PM
From: bruwin  Read Replies (1) of 78768
 
"This cash has to be accumulated before it can be distributed"

Whatever amount the directors of a company decide to "distribute" as a dividend originated from the Total Revenue that entered the company as can be seen in the top line of a company's Income Statement. Once all the various expenses and costs and tax were deducted from that Total Revenue the amount left over is the Gross Income. And if a dividend is decided upon, that amount is deducted from the Gross Income leaving the final figure of the Net Income.

And it's that Final Net Income figure that is algebraically added to the "Retained Income" in the Balance Sheet.

Now, I'm not sure what you mean about "cash accumulated" and "before it can be distributed".

When someone refers to "distributed" I connect that with Dividend payments to shareholders. The only other ways for a shareholder to benefit is from the sale of shares or when the company liquidates and its assets are distributed between the shareholders, and a big part of those assets will be what is represented by the accumulated Retained Income number .....
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