Dividend Ratios Flashcards
Learn the accounting ratios required for the IFAI module of the Company Secretary Qualifying Programme
Earnings per Share Ratio
Profit for Period - Preference Share Dividends and Non-Controlling Interest /
Weighted Average Number of Shares
How are Earnings Per Share shown?
In pence
What is Earnings Per Share used for?
To set a market value for shares
Must be stated on the Statement of Financial Position
What is Earnings Per Share used for?
To set a market value for shares
Must be stated on the Statement of Financial Position
What Accounting Standard does Earnings per Share follow
IAS 33
What is the Price Earnings Ratio?
Market Price per Share /
Earnings per Share
How is the Price Earnings Ratio shown?
Time in years it would take the company to generate profit to cover the market value of the shares.
Market Price per Share
Earnings per share X Price Earnings Ratio
Market Price of Company using EPS and PER
EPS X PER = Market price per Share (MPS)
MPS X no of Shares = Market Value of Company
Dividend Payout Ratio
Dividends for year / profit for Period- Preference Dividend x100 = %
Dividend Cover
Profits from period ( before dividend) / Dividends for Year
What does dividend cover show and what is a good number?
How safely company is paying dividends.
Greater than 2 is good
How many times the company could cover the dividend payment out of profits.
Dividend yield ratio?
Dividend per share/ market price per share x100
Return on Shareholders equity ratio (ROSE)
Profit for Period - Preference Dividend /
Average Shareholders Equity for year.
Conversion Ratio
Number of Shares converted/ £100 of loan stock
