IAS 1 Dividend Cover Flashcards
1
Q
What does dividend cover show?
A
Proportion of PFY that is available for distribution to shareholders that has been paid and what is available to finance future growth
2
Q
A dividend cover of two times?
A
Indicates company had paid 50% of distributable profits as dividends and retained 50% to finance future operations
3
Q
What is worth investigating?
A
Whether dividend cover has significant change
4
Q
Reason for significant dividend cover change?
A
Profits fallen but directors want to pay same amount of dividends to shareholders
